The Truth

Most of my knowledge of the hydrox story comes from this Fortune article: http://www.business2.com/articles/mag/0,1640,4537,FF.html Paul Lukas reports:
Hydrox debuted in 1908, the signature product of the nascent Sunshine Biscuits, and ruled the category until 1912, when National Biscuit (later Nabisco) launched the remarkably similar Oreos. Given Nabisco's superiority over Sunshine in everything from distribution channels to advertising budgets, it was no contest--Hydrox never had a chance. Over the years, Oreos' popularity and market hegemony became so overwhelming that the product transcended the consumer realm and came to be viewed as a cultural icon, an American original--even though there was nothing original about it.
Yes, we were had. But then what happened? Hydrox were no longer even manufactured.
[Keebler] acquired Sunshine in 1996 and, after a careful review process, is now bringing Sunshine's cookies under the Keebler brand umbrella. Most of the products will simply get a packaging revision, but Keebler decided that the Hydrox situation called for more drastic measures. The cookies themselves have been given a kid-oriented design face-lift, with an updated flavor formulation to follow this spring. The biggest change, however, is the name: Hydrox will henceforth be known as Keebler Droxies.
"Updated flavor formulation..." there you have it. I'd highly recommend reading the whole article, it's very informative.