By their own conference's tiebreakers, as I remember it. Wasn't the final tiebreaker BCS standings, and Texas was behind Oklahoma?
Just because it's a conference rule doesn't mean it's not a bad luck, especially if it's stupid and completely correctable rule.
The absolute tiebreaker was BCS ranking, yes. But at the time, the SEC and ACC both used a rule where BCS ranking was used to eliminate the bottom team of a 3-way tie, and after that it reverted to head-to-head.
The weird thing was, Texas was the only team of the three tied teams, that hadn't played either opponent as a home game. Texas beat OU by 2 scores on a neutral field and lost an away game to Tech by one score, and OU lost to Texas on the neutral site by 2 scores but blew out Tech at home, and Tech of course beat Texas at home by one score but lost by numerous scores to OU in Norman. So Texas had no home games, and both Tech and OU had one home game.
The voters and BCS ranking had Tech well below Texas and OU, so if you eliminated them, and reverted to head-to-head, then Texas' 2-score win over OU would have carried the day. Alas, the B12 had stupid rules.
That was a deserving Texas team that got bad-lucked out of a shot, which was my point, and in light of the half-dozen mulligans Alabama has gotten in the past decade, I'm gonna go ahead and continue thinking it's a hard luck deal.