It's not MIME's fault that it was designed in an era when no one
expected the possibility of creating such labelled content. However,
such content is useful, and MIME's inability to handle such things
definitely feels like a limitation from the perspective of people who
like such things.
I don't see an inability of MIME to handle labelled content, I see
XML's deliberate decision to use a means of content-labelling which
was incompatible with MIME, while still expecting to use MIME
framing to convey XML from one place to another.
At what point does it make sense to move beyond MIME?
It depends on the purpose for which MIME is being used.
MIME does have its limitations, but the installed base of mail
clients and servers, and web clients and servers, is so large that
it would take a very compelling gain in functionality to make it
worth these applications abandoning MIME for some other format -
and the issues associated with transition would be considerable.
( not to mention the effort needed to support both formats for
the duration that such messages would be used - probably decades.)
On the other hand, it might be worth the trouble to define a
different transmission format for the sole purpose of shipping
XML around. It's not as if either SMTP or HTTP is ideal for
this purpose either.
Keith