Where does "order of magnitude" come from? In my experience, XML parsing is about three times slower than JSON and around two or three times the size. For most complex applications, this is not a show-stopper, because the bottleneck is elsewhere.

XML was a hype in 1999, when XMPP has been invented and JSON was a hype fifteen years later. When people invent protocols they just use what is trendy in the moment.