My position is that compression ratio is a largely meaningless metric in this instance, so using it as a method for justifying the use of XML (as inferred from "XML compresses really well") is also meaningless. That does not translate to "XML is bad for XMPP", I actually think it is fine, it means "XML compresses really well" doesn't add anything much in the way of justification.
I've spent way too much time on this thread already, so take what you will from it, it is all you from here on out, I am done here.