I am happy we are not using SGML, which is a base for XML and is MUCH MORE complex and is also a standard...

XML itself is a pretty focused spec. XML schemas and the whole SOAP stack is where it went off the rails.

XML was flawed due to XHTML. The key spec was XML Infoset. It removed many capabilities what XML had and focused on data transfer not document representation. That is basically JSON but more powerful (comments + namespaces + attributes).

Personally, I think you cannot operate a interface without a schema. There is always a contract. Within your own team you may not care but as soon as two team work with different order on things, contracts are needed.

And yes, SOAP, WS-*, XSLT, etc. is where the madness starts. But to be also honest, they used XML, they are not XML.

I've always had a soft spot for idref attributes, intended to support internal linking and graph structures in documents and never seriously adopted; I suspect that more important XML mechanisms exhausted the annoyance/complexity budget of implementations, until the tree-structured data applications crushed document applications as you describe.

Graphs are always hard. I would love seeing graph databases to be more common, but no.