I feel that you're overreacting HotIce. I think many anti-BMW punters are using this new leverage of the M badge by BMW (it all came to a head here a few years back with the X5M/X6M siblings) as some kind of ordinance against the maker. It's to insinuate that the marque has losts its way and that the once pristine reputation of the M badge is somehow tarnished. I've never owned a BMW (driven dozens though) but I still reckon that their cars remain exciting for all types of consumers and that the outlook for future buyers of the brand is more promising than ever. A couple of key observations from my side:
Naturally aspirated engines - as magnificent as they are with the S65 and M156 being among my top favourites - are being consigned to niche applications vis a vis Subaru BRZ, Porsche 911, LFA, Aventador, 458, 599 etc. Market forces dictate that manufacturers require greater scope of control of engine output, delivery characteristics, fuel consumption and emissions and turbocharging affords this broader scope far better than any other type of current reciprocating engine technology.
The mystique and allure of the traditional M recipe is sustainable only to a certain extent as a result of its particularly focused nature. In being so focused the target demographic is commensurately small and thus opportunities to leverage the success of the brand - not the recipe - is significantly diminished. If you reduce your opportunities, you reduce your ability to compete and if you can't compete, well, obviously you fade away into nothingness. This is a macro-economic fact of the automotive market landscape. Don't agree? Just ask Porsche, or, name me a globally viable auto manufacturer and I'll describe ways in which they have pursued opportunities to fruition.
People with money don't buy into a tradition or an ethos. They buy what they want. If what they want happens to conform to, let's say, a traditionally sporting ethos then this is merely incidental. It is a coincidence of aligned values. Consumers who don't identify with this ethos go elsewhere and if this ethos is too specific then opportunity is reduced and potential customers will look elsewhere. Such as: people in the market for a performance SUV (as abhorrent as the concept may be) buying an ML63 AMG or Cayenne Turbo because the badge carried a stronger cachet than a hypothetical X5 xDrive4.4iS.
It is the specificity of the old, traditional M recipe that would result in diminished opportunity and yet at the same time - greater competition. Look at what Merc did with the AMG acquisition. Subtly different, yet with equal appeal in other measures; AMG, RS and (to a different extent) S cars suddenly started stomping all over M's opportunity base. That recipe needed to be broadened in scope in order to cater for a wider criteria range of consumer needs. And fast!
It's obvious that whilst BMW's M division has offered models that appeal less to traditional proponents of the M ethos, the M division continues to offer superlative models that still cater for their traditional customer base. Yesteryear's E39 M5 customer demographic is more than adequately catered for with the new F10 M5. Sure, it's bigger and more luxurios and more tech-laden but it's also faster and more capable (exactly the same was said of the E39 in its day - an old man like me will remember). That's what that particular market demographic wants and will pay for. If they didn't want that would they then buy an E63 AMG? Of course not - they'd buy an M3. So, traditional M pundits have the amazing 1M Coupé to lust after, the E90/92 M3 in the twilight of its illustrious innings to snap up while they can and a bigger, heavier more luxurious M5 that still wins its comparative tests. So what really has changed for BMW M in the traditional sense? Nothing. Even the E46 M3 CSL (a highly, highly focused product offered to too many who didn't have a clue what they were spending their money on) has the E92 M3 GTS as a spiritual successor - this time offered more sensibly to the right customers.
Coming back to turbocharged engines and the statement that M no longer offers "special engines" well, if the S63Tu isn't special with its absolutely unique combination of configuration, delivery characteristics and rpm range then I don't know what is - especially in the light of the present turbocharging trend. BMW's pioneering work on the hot-side-inside concept is so groundbreaking that it was soon and blatantly imitated. Those M bastards - lost the plot they have. I don't know by what standard members here deem to judge an engine as special. Is it because the engine in the 1M is borrowed from two "iS" niche models that it's judged a half-hearted effort? What the...? It's the only twin-turbo straight six engine in series production. It makes an impressive 250 kW and a collosal 500 Nm in a silky smooth, quick responding engine fitted to a compact body. If this is not good enough then nothing will be - it's the turbo era: get used to it. I am equally confident that the new straight six in the F30 M3 will be suitably special in the context of modern practice.
As for M Performance, the automotive landscape is characterised by a trend to "plug-that-niche" in order to broaden the opportunity base. Audi has successfully done so using the combination of regular, S-Line, S and RS models. The M Performance branding is being implemented simply to offer consumers a greater range of choice as opposed to diluting the strong brand recognition and admiration of the full-blown M cars.
And finally, as for BMW's rather verbose naming convention, that's old news. Dead Horse Beaten. It's not like xDrive3.0d has done anything detrimental to the sales performance of BMW models bearing such nomenclature.