I never played a single game of 3rd edition Epic (I was mainly turned off by the disgusting Titan models they released for it.... <puke>

) but my understanding is that GW ripped off the entire ruleset from another company, namely DirtSide (iirc). Why they chose to do so when they already had a perfectly usable ruleset, I'll never know. Maybe they killed off the game intentionally.
Hmmm, my gaming group at the time never had an issue with the power level of the mega titans, mainly due to our #1 house rule. One of our friends was a WW2 buff, so he couldn't understand why infantry had to merely stand next to an objective to take it. So our rule was that each objective had to be placed on top of a building, and infantry units had to spend one full movement phase to physically enter a building and take an objective.
The result was that we always used lots of infantry, even in games where Titan Battle Groups, Imperators, etc. were present. I was pleased to see a similar game mechanic in the PS3 game Endwar, in which infantry are very vulnerable out in the open. Also in Endwar it takes time to actually enter and secure the building, which brought back plenty of Epic nostalgia.
What I miss most of all about 2nd edition Epic however is the turn system. I believe it's the closest GW ever got to true simultaneous combat.