There are very few cases where an overclocked i5 can't meet or beat the performance of a ht enabled xeon. The xeon 1231v3 is equal to a 4770/4770k (stock).
In these benchmarks, winrar was the only test where the 4690k fell behind even when oc'd. The oc'd i5 (to a modest 4.4ghz oc) beat the 4770k stock in x.265 conversion, tied the 4770k for x.264 conversion, scored slightly higher than the 4770k in webxprt, performed better than the 4770k in premiere pro cc2014, much better in lightroom, photoshop cc2014, 3dsmax 2015.
http://www.xbitlabs.com/articles/cpu/display/core-i7-4790k-i5-4690k_6.html
So yes, in many instances ht can be replaced or bested by clock speed. If it didn't, intel wouldn't charge more for the faster i7 than they do the xeon 1231v3 and they wouldn't have improved the 4790k over the 4790 by adding more clock speed if it made no difference. Ht can help but it's not a golden ticket all on its own and pairs nicely with higher speed and/or unlocked cpus like the 4790k, 5820k etc.
It's true that not all i5's are great overclockers, but the difference between a mediocre overclocking chip and a great one is typically 4.4ghz vs 4.7/4.8ghz. Aside from intel vpro (security features for enterprise type situations) and intel's fast memory access, that particular xeon doesn't have any more instructions than the 4690k. It's not the xeon that made the xeon name famous. It does have ecc memory support, though unless you plan to pay about 40% more for ecc ram and more than a high quality z97 motherboard for one that supports ecc, that feature is of little use.
Considering a low end budget xeon is able to keep pace with a high end i5, it does show the potential of the xeon lineup. Unfortunately, it's exactly that - a high end i5 vs a budget xeon. It's the second to lowest performing xeon in the e3 v3 lineup.