Well CSS is older than XML. SGML was considered a (meta-)markup-language, i.e. a format for adding semantic info to human-readable text. It was never considered an universal data format. As an example DSSSL, the style sheet language of SGML, was not itself a SGML language, so it is clear the SGML community never considered SGML appropriate for all kinds of data. For that matter, DTD's are not in SGML language either.

XML was initially thought of as a simpler SGML, but when it took off it started to be used for all kinds of data including data which are not based on human-readable text at all. XML is fine for markup, but needlessly verbose and complex for non-markup languages.