And who decided that? Why not XML?

That's backwards reasoning. XML was too complicated, so they decided on a simpler JSON.

XML has been supported in javascript for essentially just as long as JSON, arguably longer. Heck, the first in-practice and standardized HTTP request APIs for javascript were "XMLHTTPRequest" (and similar "XMLHTTP" names). And XHTML is a thing, and it predates both JSON and AJAX.