BMW is in business to make money... if they can stick badges on things and it sells, they'll do it.
I do think the M brand is pretty diluted but what isn't these days? Ferrari and Porsche have clothing stores... Honda used to have the NSX but now sell nothing sporty. Lexus markets their "F-Sport" cars which have very little sportiness to them. Mazda applies "Zoom Zoom" to every car they sell... none of which really have any zoom. It's all just marketing.