From the post I linked in my other comment
> Oh, and the fact that you can call a language functional when it lacks first class functions makes my eye twitch. I'm tempted to upload a video of my eye twitching just to prove it.
XSLT is referentially transparent (no setf for you) but withholds from you most of the goodies that people take for granted in functional or logic programming.
You could see it was written by well-intentioned FP enthusiasts. IMO the best alternative at the time when XSLT was developed would have been XMLPerl - embedding an imperative language in something that deals with the XML-specific parts appropriately. But Perl was never enterprisey enough, and XmlPerl died a painless death.