Small guy syndrome in answer to your question. Chip on shoulder forever etc. First cousin of the 335i mob.
Why didn't you just tell him that the 1M is third rate in every way compared to the M3. You could also mention that the 1M is a manky looking Noddy car of a thing and is so badly proportioned that it's like something a child would draw. You can always get other friends.
Ps - I'd would have left out that bit if he'd been diplomatic about it.