It's understood that the UCI had alternative recommendations against the removal of any track cycling events. Instead, it was suggested that the road time trials be removed to make way for BMX. The thinking was that road cycling is already a strong commercial discipline of the sport, and in recent Olympics, the ITT also necessitated a completely separate course to the blue ribbon road race.
A dedicated ITT course places additional cost pressures on the host nation, not to mention road closures. Also, BMX is primarily a junior sport where riders tend to progress through to either road, track or MTB racing. It will also require a host nation to build a completely new and specific course for only two medals, and the action of all events would result in some 30 minutes of actual racing.
All officials have pointed out how track cycling is a winner for the host nation. It is one of the first events to sell out all seating for all sessions, and indeed it could be argued, increasing the length of the track program would only result in increased returns for the host nation, especially if it has to build a covered velodrome up to Olympic standards.