The E46 M3 WAS UPDATED with the "competition package" or "CS" designation when the C55 became availiable. The CS version had upgraded brakes, steering rack from the M3 CSL, along with suspension tweaks and a new DSC system to make it perform better on the track. (Just like the C55 got major suspension/steering/ESP upgrades compared to the C32).
Evo tested the E46 M3 CS against the C55 in a head to head comparison on their benchmark track, and their laptimes were very close, just 0.3 seconds apart. Remember, the C55 had narrower stock tires, smaller rims, and NO mechanical LSD.
Now, the differences in laptimes between the E92 M3 and C63 appear to be much more significant. And now with the new E90 M3 sedan and optional DSG gearbox and adjustable dampers, the C63 has lost the comfort/practical advantage the C55 had over the E46 M3, which only came in coupe form.
The main advantages the C63 has over the new E92/E90 M3 is 1) Styling, (which is subjective), 2), straight line acceleration, and 3) status of a 3 point star (which is also subjective).