What was the cause of overheat at such young age of 68K miles?

Easier option is to remove the cyl head and replace the gasket. Just be careful when torquing the bolts on aluminum block.

^ I'd guess that age more than mileage has deteriorated the cooling system and that something gave way and caused overheating?

I've had my radiator (pinhole leak caught early), expansion tank (x2), engine fan clutch (soft fails probably because of visco oil leak) and electric aux fan all fail fairly recently, and all before my X reached 50k. A few hoses were also on the verge of all the hoses I decided to replace.

I am at 115K now and the cooling system is still stock.
In the Spring 2015, I will do a cooling overhaul as preventive approach.

Lost of coolant is the major reason for an engine to over heat, that is followed by a stuck thermostat in the close position. Lost coolant could be from a radiator or heater hose letting go or the expansion tank crapping out which is a known problem with the BMW. But the driver should have been aware of the temperture rising and should have stopped the car to prevent damages to the engine.

Wow, All these failures even before 50K! That is unusual.

I come from the E39 (5-series) world, the radiator, reservoir fails around 130K, the fan clutch around 150K etc. Not at 50K.

I would say past 100k without replacing anything is (pleasantly) unusual from what I've read. I envy you! :)

I follow the E46 guys a lot since they are a large sample of the same engine as I have, and cooling system PM is heavily preached over there.

FYI it's not always mileage on these parts but AGE.

Think about how old these plastic/rubber bits are, my fan clutch was shot at 62k and almost seized but my X was already 9 years old.

Agree on this. A bit of vigilance and a lot of luck saved me from a similar situation when my upper hose parted ways with the expansion tank. I had just gotten the X, newly serviced by the PO, and the tech hadn't inserted the hose deep enough so the clip was not engaging anything. Hose separated from tank while I was driving home, dumping the coolant. I was able to put her to the side and shut her down quick while the "low coolant" and "engine overheat" messages were flashing.

Let her cool down, refilled with water, and got home. Researching that night, I was horrified by all the stories of M54 overheats that apparently kills a lot of them. I observed the system for months after for any permanent damage, which incidentally allowed me to catch the trans cooler leaking into the coolant early and save the trans.

If I had ran out of luck then, I'd be posting a similar dead motor by overheat story for a 29k mile X5.