The version of the story I heard when I worked there was the BBC let the lease expire on the building where they were storing the original tapes, and they were subsequently bulldozed by the new owners. (Another version had the building abandoned and subsequently sinking into a swamp, which is equally plausible.)
I like that story, especially the swamp version ("Kroll! Kroll! Kroll!"); however, as I understand it, the deletion of old Doctor Who adventures (and other shows, which generally had it worse) was an ongoing process rather than a one-off event. ("The Highlanders" was wiped in 1967, only months after it aired; "Fury from the Deep" was the last '60s serial to go, getting the chop in 1974.) The Beeb finally changed its archiving policy in 1978 (namely, "do").
I'm wondering if they will cast any other First Doctor era lookalikes for the Christmas special. (That photo of Susan on Twelve's desk in the season premiere was some pretty on the nose foreshadowing.)
I'm starting to develop a notion that this is indirect foreshadowing for the First Doctor. My reasoning: the picture of Susan appearaed alongside a picture of River Song, whose story of course came to an end in the Christmas special, "The Husbands of River Song". The Twelfth Doctor, this season, is more or less in a position of still grieving her loss. Meanwhile, Susan's absence relates most directly to the First Doctor. I can see them in the Christmas special coming to terms both with their impending regenerations and the people they've lost on the way.
If that's so, then it would make sense for neither River nor Susan to appear in person, the emotional arc being driven by their absence. (Alternatively, the First Doctor may wind up asking the Twelfth Doctor finally to fulfil his promise to come back to Susan. That could work. It might start to push him into Tenth Doctor Farewell Tour territory, though.)