Great thread.
If you put together stock rotors, racing brake fluid, aftermarket pads, r-compound tires, a professional driver and 5 hot laps on one of the most punishing tracks in the world for brakes you get brake brûlée. Not much of a surprise. All the components put together were never tested as a system in conditions like these.
This post explains pretty well the events that led to the failure.
The M3 brakes are not sexy enough by today's market standards but I believe they are very good brakes even in stock form. They could be better under continued heavy use.
FYI
here are the brakes on the M3 (FNR-AL 1 piston), M5 (2FNR-AL 2 piston) and Mercedes S65 AMG (2FNRV-AL 2 piston 4 pads). It is not just BMW that uses floating calipers in high end cars.