[eyelidlessness]

On the one hand, I can’t help but point out you forgot to mention the other big inherent complexity that would make XML-as-FS a uniquely complex beast: namespaces.

On the other hand, I can’t help but point out that a related technology comes very close to demonstrating how you might map XML to a file system: XPath. Probably the biggest issue would be syntax, and again largely due to namespaces.