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
I'd guess that its popularity orginally stemmed from the fact it solved the right problems in a way that wasn't exceeding bad for enough big players to gain their support and thus gain Widespread industry adoption. At this point, it's rather strongly embedded into the landscape since there's so much component development invested around XML. The HIPPA and other EDI XML schemas and adapters that ship with MS BizTalk Server (and BizTalk itself) are a great example of the mountain that's been gradually built on top of XML.