I happen to be quite fond of XML. Is it as simple as JSON? No. But is JSON as expressive as XML? No. Is XML as compact as ASN.1? No. But is ASN.1 conveniently editable by a user? No.
It’s its own thing. It has encoding support, schema validation, namespacing, etc. on top of JSON to provide value-add. Don’t need it? Then use JSON. Need it? Use XML.
As to SOAP, I’m a big fan, but you sure as hell won’t find me encoding config files in SOAP. Not only is that utterly non-sensical, but it’s not why SOAP has the features it has. They’re there because they provide a level of interoperability and managability between enterprise systems that a simple web app/service just doesn’t need. So don’t use it.
And of course, there’s the standby “it’s everywhere” argument. And yes, it’s valid. Going with the encoding that “everyone else is using”, particularly when it has the features you need, is a valid reason. It’s not the whole picture (if so, your decision making process is severely flawed), but it’s a piece.
Is it ugly? I’ve never thought so, but I can understand. Does it obfuscate the content? Yes. Is that a problem? Well, it can be, but I find the benefits it provides to outweight it, and tooling support mostly eliminates it entirely.
As to it being misused, I just don’t think so. That fact that it’s everywhere is a huge plus. The fact that it’s structured and hierarchical is as well. Could you use JSON? ABSOLUTELY! And go for it if you want. Most config files don’t use much of the fluff of XML, but that doesn’t mean the core of XML that they do use is a fundamental mis-use at all. Since when is structured data outside of the domain of XML? Yes, it’s the bastard child of SGML, but what on Earth makes it ONLY valid for document markup? Because some reasonably official source you read a decade ago remarked as such?
I say just let the format speak for itself. Yes, it has trade-offs. It’s verbose, more than anything, which impacts readability and storage size. Accepted. But it comes with a lot of value that makes it a fine tool in a variety of situations, despite the verbosity.