Hi,
the <style> element is only a simple data/attribute storage - and when a new plugin/layer/hotspot will be created and has a style attribute set, then the attributes from the given <style> element will be copied to it (does the same as the loadstyle() action) .
Implementing a real full style system like in CSS would be way more complex and would make everything way slower. Please don't forget that krpano as web-application is only AS3(Flash) or Javascript(HTML5) code and not native code, so there are performance limitations and to keep things fast and simple, they shouldn't be too complex.
That means that <style> is basically only a little helper tool that allows defining the attributes that are the same for several elements together at one place.
But I'm looking for ways to make it possible to resolve the styles before settings the xml attributes of course - maybe by an additional pre-xml-parser step, but here again there are some performance-tradeoffs to consider... I can't say yet if or when that would be possible.
Best regards,
Klaus