If you are looking at one SAX element, you have no access to another. If you are looking at a text node, you have no access to a containing element. When you write a SAX application, you need to keep track of your program's position in the document somewhere in your own code. SAX does not do it for you. Also, if you need to look ahead in the XML document, you are just out of luck.
Some applications are simply impossible in an event driven model with no access to a tree.
Of course you could build some sort of tree yourself in SAX events, but the DOM allows you to avoid writing that code. The DOM is a standard tree representation for XML data. The Python mapping of the API is substantially based on the DOM Level 2 recommendation. Some aspects of the API will only become available in Python 2.1, or may only be available in particular DOM implementations. How this is accomplished is not covered at all by DOM Level 1, and Level 2 provides only limited improvements.