I'm no lens authority by any means, but indeed, it looks like something like Cursor / Axis could be done with the lens zipper.
https://github.com/snoyberg/xml/blob/0367af336e86d723bd9c9fbb49db0f86d1f989e6/xml-enumerator/Text/XML/Cursor/Generic.hs#L38
This cursor datatype is very much like the (:>) zipper type (I'm linking to old code, because that's when I understood it - the newer stuff is semantically the same, but more efficient, more confusing, and less directly relatable):
https://github.com/ekmett/lens/blob/f8dfe3fd444648f61b8594cd672c25e70c8a30ff/src/Control/Lens/Internal/Zipper.hs#L317
Which is built out of the following two datatypes:
1) parent (and the way to rebuild the tree on the way back up) is provided by this datatype:
https://github.com/ekmett/lens/blob/f8dfe3fd444648f61b8594cd672c25e70c8a30ff/src/Control/Lens/Internal/Zipper.hs#L74
2) precedingSibling / followingSibling / node is provided by this datatype (which is pretty much the familiar list zipper!):
https://github.com/ekmett/lens/blob/f8dfe3fd444648f61b8594cd672c25e70c8a30ff/src/Control/Lens/Internal/Zipper.hs#L317
One way that this would be powerful is that some of the Axis constructors could return a zipper. In particular, all of the axis yielding functions except the following would be supported:
parent, precedingSibling, followingSibling, ancestor, descendent, orSelf, check
This is because zippers can be used for modification, which doesn't work out very well when you can navigate to something outside of your focii's children. If we have a new datatype, that represents a node's payload, then we could conceivably represent all of the axis yielding operations except for parent / ancestor. However, those operations would be navigations to payloads - further xml-hierarchy level navigation would be impossible because you'd no longer have references to children. (further navigation into payloads on the other hand, would still be possible)
So, that's just my thoughts after looking at it a bit - I hope it's comprehensible / helpful! An XML zipper would be pretty awesome.
-Michael