General Parsed Entities Don't Work
In its early days, expat was lean and mean and couldn't be bothered with reading the external DTD subset. Entities disappeared. I was surprised to learn that this behavior - which surfaced in Mozilla as well - wasn't an odd choice. Rather, it was explicitly countenanced by the XML 1.0 specification.
I knew that external entities couldn't have DOCTYPEs, but the implications of that didn't really hit me until I took a job at a publisher where much of my work was DocBook in, DocBook out. Chapters were entities, books were documents, and all the entity declarations lived in the book file. Since I worked in the chapters 99% of the time, I had a problem. Other than text editors, most of the tools I use were dreadfully confused by these files with unresolved entities. (Wrapper files are not fun to manage, either.)
Jealousy of SGML
While attending a few XML conferences, I'd heard rumors of a distant power called SGML. While the assumptions of the SGML community frequently drove me up a wall, it was very clear that the SGML folks had some processing ammunition I really wanted - things like SUBDOC and a greater variety of entity types.
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