Bluetooth off + Handoff (on or off - does not make a difference) = Regular speeds (avg 11.5 down out 12 max)
With BT OFF there is no opportunity for Handoff to generate BT traffic so WiFi should be unimpeded.
Bluetooth on + Handoff off - Slow internet speeds (avg 1.9 down out of 12 max)
This should have been the Mavericks and before situation, BT is being used to talk to peripherals but not for Handoff. Is this WiFi speed "normal" for you?
Bluetooth on + Handoff on - Extremely slow internet speeds (avg 0.3 down out of 12 max)
Yep, so my hypothesis is that Handoff generates additional BT traffic which generates additional interference with WiFi - do you have any iDevices enabled for Handoff?
It would be interesting to find if active Handoff devices were present to generate this additional traffic or whether even if polling for Handoff devices is enough to degrade WiFi?
This expains how an OS update breaks WiFi when the previous version was fine - it hasn't broken WiFi per se, it has generated additional BT traffic to support the new function - and that interferes with WiFi to a previously unseen extent.
Hard to see why this wasn't picked up in testing (perhaps their test environments aren't as WiFi polluted as the real world), especially given the <cough> 10-12yrs knowledge of the effect of BT interference on 2.4GHz WiFi networks....