Bulk insert is the fastest way to load data into SQL Server, especially if it is minimally logged.  The data source can only be a text file.

The fastest way to get the data out of Oracle is to dump it to a local disk.  The fastest way to transfer the data is to copy the file (even faster if you use FTP) rather than a direct connection that will have row-by-row overhead.  And the fastest way to load the data in SQL Server is bulk insert.  There are more steps involved, but anyone who claims this will not be faster than a 3-hour DTS transfer either doesn't know what they are talking about or is intentionally lying.

They may not have space on the Oracle server to dump the table to, or they may not want to create a share you can read from for security reasons.  (An answer is to dump the file to a network share, or a share on the SQL Server).  If they had a valid reason for not wanting to use a CSV file I could understand, but if they simply say they don't think it will be faster then they are wrong.  It's easy enough to try it once to see what the difference is.

I'm not an Oracle expert, but I've heard from Oracle users that it can be difficult to export data.  It sounds to me they just want this to be your job (maintaining the DTS package) or have it percieved as a SQL Server performance issue, rather than expending any effort to do the job correctly.