This question is a little vague in that what do you mean about the ‘IIT system’? If you mean by the academic system then both BITS Pilani and IIT are modeled after the American system, so are pretty similar. The only difference being that attendance in lectures is not compulsory in BITS – so, there is a lot of freedom to pursue whatever interests you may have in BITS Pilani.
If you’re talking about the entrance examination system then most people in BITS Pilani are those that probably did not get a good enough rank in JEE to get a major of their choice in one of the top 5 IITs. Let’s be realistic here – I have yet to see anyone choosing a popular major in BITS Pilani over a popular major in the top 5 IITs. Of course, there are a lot of students who probably got a good (by ‘good’ I mean the popular/competitive ones like CS, EE, ECE, Mech) major in IIT Roorkee, Guwahati or one of the new ones but chose BITS Pilani over it.
Upon comparing my experience in BITS with some of my friends who attended the top 5 IITs, I realized that the competition in academics is definitely a lot more in the IITs… students are more interested in academics and research there, and the level of professors/courses taught is definitely a notch above BITS. The same cannot be said for the rest of the IITs unfortunately. It’s pretty clear that in the haste of doubling the number of IITs over the past 6–7 years, the standard of education in the new ones has been diluted (and so is the capability of the incoming class).