Now, XML itself is one problem, but the "culture" (eg, usage norms) around XML is another -- much like Java's cultural preoccupation with abstraction and boilerplate, XML-based formats have a tendency to veer towards the unwieldy and verbose. XMPP is no exception.
While XMPP has been instrumental in propagating standardized presence and IM, its age is showing. Unless we develop a modern, open replacement that is natively suited to the needs of today's Internet (voice, video, file transfer, group messaging, etc+), we will see companies continue to develop proprietary solutions that are locked behind walled gardens.
+XEPs and extensions are insufficient; too many optional extensions hinders interop and contorts the system beyond its original design specifications. Just ask anyone who's tried to implement chat/buddylists on top of SIP presence.