XHTML would have made the Semantic Web (capital letters) possible. Someone else could have done search better. We might have had a proper P2P web.
They wanted sloppy, because only Google scale could deal with that.
Hopefully the AI era might erode that.
But that universe did not happen.
Lots of "modern" tooling works around the need. For example, in a world of Docker and Kubernetes, are those standards really that important?
I would blame the adoption of containerization for the lack of interest in XML standards, but by the time containerization happened, XML had been all but abandoned.
Maybe it was the adoption of Python, whose JSON libraries are much nicer than XML. Maybe it was the fact that so few XML specs every became mainstream.
In terms of effort, there is a huge tail in XML, where you're trying to get things working, but getting little in return for that effort. XLST is supposed to be the glue that keeps it all together, but there is no "it" to keep together.
XML also does not play very nice with streaming technologies.
I suspect that eventually XML will make a comeback. Or maybe another SGML dialect. But that time is not now.
It got abandoned because it sucks. New technology gets adopted because it's good. XML standard were just super meh and difficult to work with. There's really not much more to it than that.