I think I have to sum up my view on this matter, as I now feel that we have come as far as we can, due to lack of information.
The S4 seems to be a superb car, even a great driver car. In some markets it is also very competitively priced. It has all the bits the standard 335i lacks, at least to be meaningfully compared to the S4. BMW has the Performance line that somehow works as a means to come closer to the specifications of the S4. I do not think the former will be faster than the S4, for that to happen it would need an LSD, and as that will not happen, well, I would just like to know how much difference the PP really does.
I'm a bit surprized that BMW has not promoted the Performance line more, e.g. by supplying equally equipped 335i cars with and without the Performance parts. They seem to work wonders on the 135i... why does BMW not want to sell the bits?