Colorado did win the Big XII title in 2001 by beating Texas (with Chris Simms, god did he suck)
The controversy with Colorado was that they were arguing they should be in the BCS title game, but no one wanted them in there because they were a 2-loss team, though on the other side those two losses were to good teams (Fresno State which went undefeated for most of the year and a regular season loss to Texas which was avenged in the title game).
Losing to Oregon in the Fiesta bowl took the wind from that argument though, and made Oregon the "should have been in the title game instead of Nebraska" choice