Good reply...but the real question is why has nobody stepped up to replace it? Close quarter communication is only becoming more prevalent, why do we live with a broken standard?
The LTE Bluetooth standard actually does make large inroads towards removing a lot of the less clear parts of the standards, and reducing the size of the specification. It is still far from perfect, but attempts are being made by the industry to clean things up.
WiFi Direct (which is also somewhat horrible, but somewhat less), is also a competitor in this area. It hasn't seen a lot of adoption, but there are a few things that use it.
Apple's AirDrop is also a proprietary protocol that can handle a lot of this peering stuff, atop WiFi, and they seem pretty committed to keeping it around for all their stuff for the foreseeable future.
Zigbee is more of a competitor for Bluetooth Low Energy, which is quite a bit more modern, sane and reliable than Bluetooth Classic.
It never really had much of a chance though because BLE support was sort of added to phones for free as part of Bluetooth. With Zigbee (or ANT or Thread) you'd have to add a new chip, which phone manufacturers aren't going to bother with for a tiny market (though I think there are a very small number of phones with ANT support).
