Yeah, I remember that. I was very glad (as a developer) when they axed the whole themes idea. But I was also disappointed (as a user). The feature actually made it into the official release (OS 8.5), but they just didn't include any themes. But you could download them from the shadier corners of the 'net, and they worked just fine (Apple even left the oh-so-conspicuous Themes popup menu in the Appearance control panel, despite the fact that there was only one choice). They were really pretty cool.
IIRC, Apple's theme system was a bit faster than Kaleidoscope, a third-party "scheme" tool that was all the rage back then (probably where Apple got the idea). You could do some amazing stuff with that, but it slowed everything down a LOT.
I'd like to see this feature come to OS X. The time wasn't right for it back then, but now it is. With OS X, it wouldn't make my life as a developer harder at all, whereas if definitely did in OS 8/9.