I don't think the S65 is being killed because of US political pressures so much as EU pressures and the fact that their market will likely respond better to a more fuel efficient option. Gas prices here are still relatively low but in the UK and Europe prices are much higher.
I think the blame belongs in two places; one being BMW's decision making and effort to save costs and also to give the market what they want. The enthusiasts on here unfortunately don't represent the market-at-large and I think that market is wanting more "green" options.
On BMW's end I am sure they'll save cost of fines for not meeting EU/US fleet fuel standards. But I also think this is an engineering cost savings move. There is no question that the new M3 will powerful, but it's just a rehash of the N54/N55 engine rather than a truly unique M-division engine (like the S54, S65, S85, etc) and more like the 1M which form powertrain standpoint is just a tuned 135.