Weird donkey pot

[Suited_Queens]

SB: $6.20
BB: $12.75
UTG: $35.75
MP: $8.75
Hero (CO): $32.20
BTN: $2.95

Preflop: Hero is dealt Q[img]/images/graemlins/spade.gif[/img] T[img]/images/graemlins/spade.gif[/img] (6 Players)
UTG calls $0.25, MP folds, <font color="red">Hero raises to $1.25</font>, <font color="red">BTN raises all-in to $2.95</font>, SB folds, BB calls $2.70, UTG calls $2.70, Hero calls $1.70

Flop: ($11.90) K[img]/images/graemlins/club.gif[/img] 7[img]/images/graemlins/spade.gif[/img] T[img]/images/graemlins/club.gif[/img] (4 Players - 1 All-In)
BB checks, <font color="red">UTG bets $2.00</font>, Hero calls $2.00, BB folds

Turn: ($15.90) K[img]/images/graemlins/diamond.gif[/img] (3 Players - 1 All-In)
<font color="red">UTG bets $7.50</font>, Hero folds
Uncalled bet of $7.50 returned to UTG

River: ($15.90) 3[img]/images/graemlins/club.gif[/img] (2 Players - 1 All-In)

Pot Size: $15.90 ($0.75 Rake)

My logic:

I dont think I should have folded on the flop because BB was clearly a donkey and when UTG called with his stack I think that created enough implied odds to call with a weak hand.

Flop is an obvious call considering any 10, spade, jack and maybe queen help my hand and he bet so little.

This is one of those weird hands that don't come up to often, point out my mistakes. Thanks.