Two main problems: First, the "key" is too short and so repeats a ton of times on a moderately large file so you have lots of opportunity to figure out parts of the key one place and use that knowledge a ton of other places. Second, you are xoring ASCII characters so it isn't that hard to recognize patterns.
If I wanted to do something like this I would:
In reply to (tye)Re3: xor encrypt-decrypt routine
by tye
in thread xor encrypt-decrypt routine
by j0e
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