For any non-flat configuration file XML is far from a bad choice. It obviously has its issues, often YAML or something less syntactically burdensome might be better, but I'd need to hear a convincing argument before I would say that it's always the "wrong" choice for configuration files.
It's not always wrong, but you have to weigh the advantages against the disadvantages. If you want mechanical editing or syntactic validation it's an advantage. I don't like hand-editing launchd configuration files, but it's helpful that software can ship with launchd configuration files to be installed and it all just works. On the other side of the coin, if there's a lot of scripting going on in the configuration file, the XML will either become burdensome to write or it will wind up carrying around big strings with their own syntax buried within the elements, circumventing the whole point of using XML.
