Yes XML is human readable but so is comma delimited text and properties files.
XML is bloated, hard to parse, hard to modify in code, plus a ton of other problems that I
It was the late 90s and the internet was hot hot hot, but companies had systems that couldn't get anywhere near the internet. They had spent countless hours dealing with CORBA and were plotting using Enterprise JavaBeans to get these older systems communicating with their newer systems.
Along comes SGML, which is the precursor to almost all markup languages (I'm skipping GML). SGML was already used to define how to define HTML, but HTML had particular tags that HAD to be used in order for Netscape to properly display a given webpage.
But what if we had other data that needed to be explained? Ah ha!
So given that XML is structured, and you can feel free to define that structure, it naturally allows you to build interfaces (in a non-OO point of view). It doesn't really do anything that other interface languages already do, but it gave people the ability to design their own definitions.
Interface languages like X12 and HL7 existed for sure, but with XML people could tailor it to their individual AIX or AS/400 systems.
And with the predominance of tag language because of HTML, well it was just natural that XML would get pushed to the forefront because of its ease of use.