The Core 2 Duo is actually an assload faster, not even near the same speed. Also, it was more the issue of cooling the Pentium D chips over anything else that made BTX arise. Many OEM companies still use it, as it is technically a less expensive platform, since they can easily cool the processor and everything else with one fan. Saves cost in the long run.
BTX was really a last ditch attempt by Intel to force AMD out of the OEM market at the time, since (conveniently) the BTX form factor does not work with processors with an on die memory controller. This is due to where the memory is placed on the board.
It will likely fade away into oblivion once Intel's new Nehalem processors come into production later this year, as they will have an on die me memory controller.