Anyone who spends time in both cars know they are VERY different from the factory. Yes, a 335 can be modded... as can any car. If saving $$ is important or if you can't swing an M3, the 335 is great. Unless someone has a real mod fetish, I would much prefer to buy a stock M3 than a 335 and mod it even if the 335 can be modded to be a little faster. If you build a 335 into an M3, the cost of doing so would put you very close to a stock M3 but with the M3 you actually still have warranty
. There is nothing special about the 335 other than mod capability IMO. You could get an STi or Evo and do the exact same thing (but likely with better capability
). The M3 is a different car and in a higher price class so you would expect that but anyone who claims the S65 is not a special engine and adds a ton to the car is either crazy, blind with fanboyism, or has never really experienced one. I'm not a blind M3 fan (I don't even own an E92 M3 any longer) but I absolutely do appreciate the quality of the car and it is very different than a 335.
If I had the choice of a modded 335 that is faster in a straight line (and capable on the track) or a stock M3 for the same price, I would pick the M3 hands down. It isn't badge related and it isn't status related. It is the difference between a balanced, purpose built car that feels and acts like a sports car with a race inspired engine with a flat torque curve with tons of torque to the wheels especially at the track (and any experienced track rat will understand the benefit of that over FI) versus a frankenstein 335 that is bolted and pieced together.
But, as others have said, this is played out and tired. If you own a 335, be happy and stop worrying about the M3. If you own an M3, don't argue with the 335 guys trying to prove their car is as good or better.