They didn't discontinue it, they merely stopped selling it in the U.S. market because Americans like their engines as big as possible (and have the cheapest gas prices in the world - the two go hand in hand). The 2.5 sits in the middle of their range of available engines in most other markets. The U.S. gets only one of the eight or so possible X3 configurations offered elsewhere.

Is it underpowered? Not in my opinion, but if you like to drag race everyone off the line at every light then you'd probably prefer the bigger engine. The 2.5 will easily cruise at 100 mph and climb hills without the need to shift down in most cases. The 3.0 will be easier to resell in the future