I understand that iOS allows for background region monitoring based on iBeacon, but i can't find docs that indicate whether or not the user MUST have bluetooth enabled?
Does it still work if the Bluetooth is disabled from the control center? I feel like this is almost a useless if users have bluetooth disabled.
Yes, Bluetooth is required to be enabled. How you respond to it being disabled is app-specific.
This link (Location and Maps Programming Guide): https://developer.apple.com/library/ios/documentation/UserExperience/Conceptual/LocationAwarenessPG/RegionMonitoring/RegionMonitoring.html
gives some guidance on the scenarios and how you might approach handling them.
In iOS 7.0 and later, always call the isMonitoringAvailableForClass: and authorizationStatus class methods of CLLocationManager before attempting to monitor regions. (In OS X v10.8 and later and in previous versions of iOS, use the regionMonitoringAvailable class instead.) The isMonitoringAvailableForClass: method tells you whether the underlying hardware supports region monitoring for the specified class at all. If that method returns NO, your app can’t use region monitoring on the device. If it returns YES, call the authorizationStatus method to determine whether the app is currently authorized to use location services. If the authorization status is kCLAuthorizationStatusAuthorized, your app can receive boundary crossing notifications for any regions it registered. If the authorization status is set to any other value, the app doesn’t receive those notifications.