OK, let me summarize. I am not a tuning expert, or actually not an expert in anything. But I have played with tuning turbo cars before.
1. Running 87 Octane in a car designed for 91+ will in most instances HURT the engine. Although the ECU will compensate, it will compensate only AFTER detecting knock. And since its designed for 91 Octane the ECU will keep reverting to the high octane map and continue knocking - testing the gas - and pulling back timing and adding fuel. That is not good for the engine.
2. Ethanol in fuel is not bad, although it contains less energy - therefore increases fuel consumption it has a very high octane rating. Small engine, turbos, ethanol - HUGE power. If you can get 100% gas and then add 10% Ethanol you would increase Octane rating substantially. Since un-tuned M3 will adjust to 93/94 octane, this could be a neat trick for the Cali 91 Octane souls. Read here more if you like - http://en.wikipedia.org/wiki/Ethanol_fuel
3. If you run 87 Octane, you are very unlikely to feel any difference with the engine screaming at 8,000 RPM. Actually, 6,000 and above you will feel none. Dyno may, but you will be unlikely to. You will feel the difference - hesitation when you floor the car at 3,000 RPM without downshifting. At 3,000 RPM I would not call it lugging, but it is at the lower RPM range and right when you go to WOT that the car will knock and the ECU will struggle to compensate. Do that at 1,500 RPM and you will feel and hear the difference. Your engine is aging/dying quickly here.
4. ECU compensates for lower octane by reducing timing and adding in more fuel, the driver likely compensates for pulled timing (less power) by pressing the accelerator a bit deeper which results in more air and fuel. (I was going to experiment on wive's Land Rover to see if the drop in mileage on 87 erased ALL or just a portion of the savings associated with pumping 87.)
5. AIT - Air Intake Temperature has also a large impact on knocking - hot air + more tendency to knock. Not that I would recommend, but I would venture to say that in freezing weather our cars would run healthy on 89 octane. While in hot - Arizona summer type of weather 91 is possibly not enough. Though don't fret too much, unlike octane that the ECU can not measure directly, it does measure AIT, so it will select the appropriate - less aggressive map. So it will not need to compensate for lower octane gas - it will not ping to start.
6. It is unlikely that a stock M3 would benefit from anything above 94 Octane in normal weather. Tune or better forced induction would be needed to do that. When tracking the car in very hot weather - thinking Texas or Las Vegas, due to elevated AITs going to a mix of 96, 98 octane could and probably will be felt even on a stock tune. (I wonder if sticking ice cubes into the intake would do much... I bet it would for 1/4 mile runs!)
The bottom line:
Stick with 91+ octane top tier gas for your M3, as you are unlikely to save any money going to lower octane and possibly will pay later.