Overkill? I'll admit XSLT is useful, especially when your code is mostly output and not much logic, but it's also an ugly language. It can be overly verbose, which just leads to an unreadable and unmaintainable mess for a lot of people (not to mention, most people find it difficult to use at first, in the first place). A lot of this has to do with the fact that XSLT is stuck somewhere between being declarative and procedural. If I had to draw comparisons, it would be with regular expressions; it has its uses when it comes to simple well defined problems. Beautiful in concept, but not in syntax. If the programming language itself has a good DOM implementation supporting XPATH allowing docs to be built in a meaningful way, then there's little benefit in using XSLT.
Anyway, that's solely my take on it. I have no idea why they chose not to use it, but the above would partly be my reasoning for not doing so.