Peter T. Daniels responded to Marco Cimarosti:

>> - When was the letter dropped from the English alphabet?
>
> Gradually fell out of use

To add a time frame to this, the letter ETH or EDH ("Ð", U+00D0) was used on
pre-Norman English coins, e.g. to spell kings' names such as Ethelred. Toward
the 11th century, coins began to appear with either the Ð or TH spelling.

>> - Why did it happen?
>
> No one else used it?

Except the Icelandics, as mentioned, who were quite isolated from England.

>> It doesn't have this sound in any European language (apart Albanian, but I
>> guess that its orthography is quite modern).
>
> What other European language has the sound [T]? (Ans: Icelandic, which
> uses the old letters) If other languages don't have it, they obviously
> don't need to spell it!

Castilian Spanish (as spoken in Spain, not Latin America) has the unvoiced TH
sound as in English "thin," and spells it Z or C (depending on the letter which
follows).

All flavors of Spanish have the voiced TH sound as in English "this," and spell
it D. But this pronunciation only occurs immediately before a vowel and this D
is considered the same as the regular "hard" D in English "daddy" (i.e. there
are no minimal pairs), so there is no need for a distinct spelling.

-Doug Ewell
posting from work in Irvine, California