I thought this was well-known? Microsoft invented it for OWA but didn't realize what they had. A few years later other people realized how transformative it was and evangelized it. Other browsers added compatible implementations. The rest is history.
It is amusing to see the take in Avalon since we now know how that turned out. His complaints about HTML/JS/DOM are spot-on but it turns out the solution was to improve HTML, JS, and the DOM.
I'd actually find an Avalon post mortem more interesting. I remember it being the big new thing to replace all things and then it just vanished into obscurity.
We were doing XMLHTTP like communication at a startup back in the early 2000's, by making use of a Java Applet and the communication JavaScritp/Applets.
I imagine we weren't the only ones doing that before XMLHTTP was born.
Regarding Avalon, I have been doing quite some consulting projects (WPF and UWP) in the last three years, and at least on the markets I move on, there are plenty of greenfield projects. :)
I don't know the situation, but I think that you have it backwards when you say "didn't realize what they had." If what they had was a progenitor to XMLHttpRequest, a feature which almost single-handedly broke the Web, they probably were trying to cram it back into Pandora's box before anyone noticed.
It is amusing to see the take in Avalon since we now know how that turned out. His complaints about HTML/JS/DOM are spot-on but it turns out the solution was to improve HTML, JS, and the DOM.