I never said that the current implementation of instancing is not logical.
And you wouldn't need a "special syntax". It would be the same syntax as for the already implemented rotation matrix, except it would have four more numbers. That's all...
Let me give you an example:
<rotation>
<matrix>
1 0 0 0 0 -1 0 1 0
</matrix>
</rotation>
<pos>1 2 3</pos>
<scale>4</scale>
You could describe the above transformation as
<matrix>
4 0 0 0 0 4 0 0 0 0 4 0 1 2 3 1
</matrix>
This includes individual scaling for x, y and z!
See what I meant?
Basically instancing data is meta-information generated by your exporter and is not meant to be hacked in by hand. It wouldn't make sense for more then ten instances, really.
Still this is just a proposal. Something I'd love to have as a feature.
I wouldn't mind to keep the current structure as an alternative anyways.