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1. i would think the market is small because the demand is very low
2. engine swaps in E30s have been done, but it is rare. it works though . one person swapped the S54 motor into the E30. i'll post a link of his blog ish kinda thing when i find it.
3. no you are not crazy. E30s have been in rally before, and they're fun little cars. i would think it would make a fun drifter/track car too. the market is just low for mods. S13/14s are much higher in demand.S13s and S14s would probably make better drift cars too! Don't forget that the S14 in the states would require a motor swap though. don't want to be using a truck engine
i hope you do it man. E30s are cooooool! I saw an E30 325i at an autox event. it didn't do as well as many of the cars but it held its own for the power it was putting out
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