I keep looking at this card and feel like I'm understanding it wrong. If I cast it for X=3, the way I am reading it, you get three counters between the hydra and the other potential targets. But it only makes sense if you are able to put 3 counters on the Hydra and also 3 on the target. Am I reading it wrong, or is this the worst card they've printed in a long time?
You have read the card wrong in the sense that Stumpsquall Hydra's ability doesn't target anything (note that the ability's text lacks the word "target") (C.R. 105.1d). When the ability resolves, check whether any commanders are on the battlefield.
If there is one or more commanders on the battlefield, you distribute X +1/+1 counters among Stumpsquall Hydra and none, some, or all of those commanders (C.R. 107.1c; see also C.R. 608.2d). Thus, for example, if X is 3 and your commander is on the battlefield, you can choose, among other possibilities—
to put one +1/+1 counter on Stumpsquall Hydra and two on your commander, or
to put three +1/+1 counters on Stumpsquall Hydra.
On the other hand, if there are no commanders, you put all X +1/+1 counters on Stumpsquall Hydra.
I keep looking at this card and feel like I'm understanding it wrong. If I cast it for X=3, the way I am reading it, you get three counters between the hydra and the other potential targets. But it only makes sense if you are able to put 3 counters on the Hydra and also 3 on the target. Am I reading it wrong, or is this the worst card they've printed in a long time?
If there is one or more commanders on the battlefield, you distribute X +1/+1 counters among Stumpsquall Hydra and none, some, or all of those commanders (C.R. 107.1c; see also C.R. 608.2d). Thus, for example, if X is 3 and your commander is on the battlefield, you can choose, among other possibilities—
EDIT (Feb. 6): Correctness edit.