I did not get the job offer. Business casual can cover a multitude of sins. That term is widely used - and widely overused. A common rule of thumb for an interview is to dress one level up or better than the person who is interviewing you. However, I doubt that was the only reason that they did not hire you.
Appearance is only one of a number of considerations that contribute to a hiring decision.
But appearance, as well as a good handshake and being on time, all contribute to that ever-important first impression. It is helpful before an interview to do as much research as possible to get an understanding of an organization's corporate culture. You may want to stop in on the day before your interview and take a look around at how the people are dressed. Your clothes should fit you well. If you've gained weight, go shopping rather than try to squeeze into last year's outfit.