The only place a tuned 335 can beat an M3 is in a straight line. Personally, it doesn't matter to me how fast a 335 is. They are still a 3 series and I drive one almost everyday (my girlfriend has one). When I get back into my M3 the entire car is on a completely different level. The steering characteristics, the engine responsiveness, suspension, etc, etc, etc, etc are all much much different. I can't stand the lag either. It's not that bad on a stock 335, but it annoys me.
No matter how much you tune a 335, the driving experience is nowhere near as good as in the M. No doubt the 335 is still a great car compared to most, it still can't hang with the M. Period.
E92 M3 | Jet Black | All OEM Everything
E30 M3 | Alpine White | Mostly OEM