That's just terrible, maintaining this code would be torment and going forth with such a design would give immense problems when there's multiple roles working on the same feature of a website (Web designer, web developer).
It's way too verbose as well. I'd understand if you would plan on following a generic approach for certain cases, at which point you do want to generate the document based on the back-end but following a verbose way of representing what can easily be done explicitly is not what one would seek to use.
You're correct on the XML/XSLT part, it's actually proper design it's sad that you rarely get to see websites powered by XML/XSLT, though a high traffic'ed website developed by a multi billion dollar company does use it.
http://www.wowarmory.com
Code based Views are becoming relatively obsolete (Not that i'm saying that html is actually a "view"), the majority are moving or moved to a declarative approach. Take a few examples, Microsoft stopped releasing new versions of winforms for the sake of WPF which is incredibly powerful, as well as WPF/E (aka Silverlight). GWT which was developed by google, followed a code based UI for long, though they took into consideration that it's terrible to maintain and with the help of the UIBinder, GWT 2.0 will support the declarative approach. Flex follows the same concept and more to follow.
All in all, it all boils down to proper design. Use a framework that follows a commonly used design pattern and you will have much less of a headache than you would with just embedding code into your pages.
Most successful web frameworks follow the MVC pattern (which is expected really, when it comes to UI). Here are a few examples:
Ruby on Rails
Django
ASP.NET MVC
JBoss Seam
Google App Engine (Though it uses Django templating)
.
.
Take your pick and produce fully blown web apps in no time. 4 of the 5 i listed use a templating system for the views, sadly JBoss is still stuck with JSF (I call it FailSF).
