There are a few reasons why you can'y see it.
The content coming from the AJAX request is processed by the server like any other http/php request.
What is happening is the data is being cached by the php buffer, then when its done its flushing it to the output. Which apache then delivers to you.
There is so little data that there is no need to flush this buffer before the processes is done. So you are only seeing the final result.
If you had some much data outputted that it cause the output to be flushed before hand then you may get it.
The other problem is going to be you ajax request handler. I'm pretty sure the onComplete (or similar) method that you (and everyone else) is using will only be called when the output from the server request is finishing and your browser has the full data.
It may be possible to use a different event or perhaps write the ajax code your self (with out using stuff like jQuery) but i'm not even sure if that would solve your problem; as this might also be something to do the with x http request implementation.
May i ask what your are trying to do this for? there may be an easier solution for your actually problem *i'm assuming this isn't the code your actually are using on your site).
Dan