XML is a universal language that can be used in various applications and programming languages, whether to represent data or a graphical layout, like in WoW.
XML in WoW lua allows you to create templates for objects (frames etc), but you can use functions to get similar behaviour in lua. As far as I'm aware there is nothing you can do in XML that you can't replicate in lua (in this case). People who use XML to represent their GUI are often used to doing so in different environments. Habits tend to stick; it's not required to end a line with a semicolon in lua or wrap conditions in brackets, either, but Blizzard still does so in their own code.
TL;DR: Do what you want
