Because (imo) the goal should be to minimize overall complexity.

Pulling in XML and all of its additional complexity just to get a (debatably) cleaner way to express tagged unions doesn’t seem like a great tradeoff.

I also don’t buy the degenerate argument. XML is arguably worse here since you have to decide between attributes, child nodes, and text content for every piece of data.

Depends on the application, I suppose. For OP's application, pulling in XML is no trouble and gives you a much better solution for typed unions.

To get better than XML, I think you're looking at something closer to a Haskell- or LISP-embedded DSL, with obvious trade-offs when it comes to developer ecosystems and interoperability.