X-ray telescopes are required to be above the atmosphere as the atmosphere blocks EM waves with wavelengths < UV . Does this mean that the Earth's atmosphere can be thought of as a Faraday cage only allowing low energy light to pass through?
No, there is no relation. Earth's atmosphere is not a Faraday cage.
A Faraday cage requires conductor with freely moving electron so that the potential energy inside the cage is always constant by the rearrangement of electrons.
On the other hand, Earth atmosphere is opaque (see figure) in the short wavelength limit because its air molecule absorb EM waves with short wavelength. In fact, short wavelength EM waves can easily be absorbed by most molecules since the absorption of the photon involve exciting electrons to become free electrons (ionization). Even though the penetration is high, the thickness of the atmosphere can block almost all of them.
Therefore, in order to observe X-ray, we can only send those telescope in space.