Has it failed? Or have people just stopped trying to shoehorn it everywhere?
There are cases where XML is a great format. For example in the past I wrote a system for interfacing with a government department.
The thing was an epic of about 30 different schemas, however being able to actually look at a concrete schema for specification and actually be able to test against it was invaluable.
Trying to build that thing with JSON would have driven me to tears.
Well, perhaps it's not fair to say XML itself has failed, but the idea of XML as the data format to end all data formats seems to have fallen flat on its arse.
I too like the ability to validate XML against a schema and found it invaluable when dealing with a set of (needlessly) complex ant-plugins a couple of years back.
XML is not about "<" and ">" everywhere.
XML, JSON, MUMPS are semantically equivalent.
XML is far more structured than JSON.
But I can agree the spirit of the prediction lives on in the form NoSQL and JSON.