Er, it had everything to do with XML. It was introduced to give pages the possibility to fetch XML (typically feeds) and render their content dynamically; which is basically what it ended up being used for, except XML feeds were then replaced by simpler files.
Yes. XML was basically superceded by JSON, which was far less verbose and clunky.
The success of JSON has less to do with verbose/clunkiness but a lot with the available APIs in the JavaScript frontend.
JSON.parse() came a lot later. People started with eval(), which lead to quite some problems (executing code returned from some third party service, what could go wrong ....) and then various other attempts at parsing.