I'll copy what I wrote a few days ago:
The fact XHTML didn't gain traction is a mistake we've been paying off for decades.
Browser engines could've been simpler; web development tools could've been more robust and powerful much earlier; we would be able to rely on XSLT and invent other ways of processing and consuming web content; we would have proper XHTML modules, instead of the half-baked Web Components we have today. Etc.
Instead, we got standards built on poorly specified conventions, and we still have to rely on 3rd-party frameworks to build anything beyond a toy web site.
Stricter web documents wouldn't have fixed all our problems, but they would have certainly made a big impact for the better.
And add:
Yes, there were some initial usability quirks, but those could've been ironed out over time. Trading the potential of a strict markup standard for what we have today was a colossal mistake.
There's no way it could have gained traction. Consider two browsers. One follows the spec explicitly, and one goes into "best-effort" mode on encountering invalid markup. End users aren't going to care about the philosophical reasoning for why Browser A doesn't show them their school dance recital schedule.
Consider JSON and CSV. Both have formal specs. But in the wild, most parsers are more lenient than the spec.
Which is also largely what happened: HTML 5 is in some ways that "best-effort" mode, standardized by a different standards body to route around XHTML's philosophies.
Yeah this is it. We can debate what would be nicer theoretically until the cows come home but there's a kind of real world game theory that leads to browsers doing their best to parse all kinds of slop as well as they can, and then subsequently removing the incentive for developers and tooling to produce byte perfect output