It couldn't. That would mean a different thing and would be the abuse of what XML should be used for.

Whether something is inside an element or is a property of said element has important semantical meaning. But not just that, with XML you can implicitly represent ordering, whitespace and type information with much less boilerplate.

So the argument for JSON is basically boils down to: "Javascript has horrible type support and doesn't support OOP. JSON models that experience better."