Tooling was XSLT's Achilles heel. Too many tools had no or poor XSLT support. What's confusing to me is a lot of the JavaScript templating today has equally bad tooling yet everyone's in love with it.
The lack of tooling for XSLT and modern JavaScript stuff are on different sides of the adoption curve. XSLT lacked tooling on the upside of the curve so it never hit critical mass. Its other problems could have been solved had it hit critical mass and seen wider adoption.
