When is bluetooth tethering better than wifi tethering?
I would imagine that Bluetooth tethering over WiFi or USB would be a matter of convenience, or if a device doesn't have the appropriate ports for USB.  Another thought, MiWi OnDemand (jailbreak only), when being used between multiple iOS devices, will connect to a paired iPhone for internet connectivity over Bluetooth only when needed.  I suppose that Bluetooth is more on-demand whereas using your phone as a constant WiFi access point would drain the battery considerably faster.