What do you miss about an M car?
Just saying you drive an M car or something specific about how they drive? The M3 was more expensive to begin with, similar arguments were made about the 335is n M3, I think there was only a 15-20k difference in price (more for the 135i) but lots of people said the 335is was 90-95% as capable as an M3. Is that 5-10% more worth it? It depends on the person and what they want out of the car.
I'm not sure why it's hard to figure why there is a price difference, they are different cars no matter how close the performance is.
This is a good article from BMWBLOG, I think there is also a few others on the topic.
In conclusion: if you have the money, there is no substitute for an M car. But if your budget is closer to mine, you will not be let down by the underdog of this comparison. BMW’s 335iS is brilliant on track and comfortable on the road, it sounds like angels singing, and leaves you smiling after a playful drive.