Flopped set, folded House

[dandelos]

Ultimate Bet No-Limit Hold'em, $.25 BB (10 handed) Hand History converter Courtesy of PokerZion.com

MP2 ($24.65)
MP3 ($30.09)
Hero ($31.94)
Button ($14.40)
SB ($32.18)
BB ($34.01)
UTG ($27.52)
UTG+1 ($15.35)
UTG+2 ($25.50)
MP1 ($25.87)

Preflop: Hero is CO with 8[img]/images/graemlins/heart.gif[/img], 8[img]/images/graemlins/spade.gif[/img].
UTG calls $0.25, <font color="#666666">5 folds</font>, Hero calls $0.25, <font color="#666666">1 fold</font>, SB completes, BB checks.

Flop: ($1) T[img]/images/graemlins/club.gif[/img], 8[img]/images/graemlins/club.gif[/img], K[img]/images/graemlins/heart.gif[/img] <font color="#0000FF">(4 players)</font>
SB checks, <font color="#CC3333">BB bets $1</font>, UTG folds, <font color="#CC3333">Hero raises to $3</font>, SB folds, BB calls $2.

Turn: ($7) Q[img]/images/graemlins/club.gif[/img] <font color="#0000FF">(2 players)</font>
BB checks, <font color="#CC3333">Hero bets $2.5</font>, BB calls $2.50.

River: ($12) T[img]/images/graemlins/spade.gif[/img] <font color="#0000FF">(2 players)</font>
<font color="#CC3333">BB bets $0.25</font>, <font color="#CC3333">Hero raises to $4</font>, <font color="#CC3333">BB raises to $28.26 (All-In)</font>, Hero folds.

Final Pot: $44.26

Results in white below: <font color="#FFFFFF">
BB doesn't show.
Outcome: BB wins $44.26. </font>

Didn't have much of a read on the villain, because I was multi-tabling at the time. On his river shove, I feared T8 or KT. On hindsight I guess an A-high flush might have been a possibility, but I doubt it. Was my fold correct in this situation? Should I have bet/raised more on the flop/turn?