You are probably right, in some areas.  In general, it seems that people
feel the handling of the old M3 is better, and in some circles, the new
model has taken a step backward, with lighter steering and a 250 lb. weight
gain.  Engine performance is another matter, with the new unit having 38%
more power than the old M3 (U.S. model).  But, torque is up by 14%, and that
torque is found at 1100 rpm higher, so at moderate speeds, the increase is
not that much.  The net result in moderate speed acceleration is not as much
as might be expected due to the modest torque increase, extra weight, and
taller gearing in 6th gear vs. the lower gearing in top gear (5th) of the
older M3.  No doubt, in a drag race, the new model wins, by about 1.3
seconds in a 0 - 60 contest.  For the same gap to exist on the old M3 vs the
328, the 328 would need to reach 60 in about 6.9 seconds.  The actual
performance gap may not be all that much different then, but am not sure of
the acceleration time on the 328.

I drove a '98 M3 back to back with a 330ci.  The M3 is obviously faster.
Not a blowout, but the lighter weight, lower gearing, and greater torque all
add up to noticeably stronger acceleration.  The handling was not at all
similar, with the old M3 much more direct.  As a result, I bought the used
M3.

- Phil

330ci has lost a bit of class appeal.   I own a 328ic convertible with
upgraded chip + intake.  Yes, the equivalent
E36 M3 is faster, but in normal driving conditions the difference isn't
enourmous.

The new M3 does, in my option, widen the gap.  But if you can get a good
deal on a 330ci, then take it.  you can get a
bit more out of it with improved intake and performance chip, but the
improvement is not so dramatic as that with the
earlier engine models.  For example, i went from 190hp to about 225hp on my
328.  You wont get anywhere near that % gain
with simple bolt-ons, unless you go for forced induction ....

Old 328i: 193 bhp.  Old M3: 321 bhp.  That's quite a gap!

330Ci: 231 bhp.  M3: 343 bhp.  The 330Ci has if anything closed the
gap, hasn't it?

Are "appeal" and "class appeal" different things?  This isn't
communist Russia - buy the car you like, not what you think you should
buy, or what others tell you to buy.

Well, do you like your 323Ci?