Why doesn’t this work

Try to use the command:

cmd.exe /c START c:\path\to\document.jpg

Document must be on the remote computer, so you have to copy it there by other command before calling psexec.

As you can read from psexec help

-c: Copy the specified program to the remote system for execution. If you omit this option the application must be in the system path on the remote system.

So your xml file is copied on remote sys/USER:[domainname]username]tem and executed, this gives you the error.
If your xml is part of an application you have to run in remote computer, one solution is compress the app with all necessary files in a self-extracting EXE that runs main command when extracted.

If you just have to copy a file, why don't you use a simple script that maps remote folder and then copies file? Something like:

NET USE \\computername\sharename password /USER:[domainname\]username
xcopy .....
NET USE \\computername\sharename /DELETE