If they actually served the pages with the correct Content-Type, their pages would not render in any browser.
You mean it wouldn't render in IE. In any more reasonable browser, if there were any parsing errors in the XHTML then you would get a big fat error message but otherwise it would render just fine.
I could have been a bit more specific in my earlier comment as I include Firefox in the group of reasonable browsers, even though with it, you get the YSOD. I know a lot of people swear by Opera, but I don't use it, so won't include it in my reasonable browsers list purely for subjective reasons.
Though as I said, what does it matter now that XHTML 2 has been canned.