Owning an e46 ///M3 and a Z4 ///MCoupe, both with the same s54b32 motor, albeit with different gearboxes, I had a similar experience with my ///M3.
When i purchased my e46 i was very disappointed with the way it was performing. It was significantly slower than my ///Mcoupe.
After many many many months of trying everything it came down to the following:
My e46 had a supersprint exhaust
My e46 had an afe intake
My e46 had "sports cats" installed
My e46 had a custom map
BIG issue was that the map was a piece of poo and other than removing the top speed limiter it did not take into account any of the other mods on the vehicle and in all cases the car was simply slower and weaker as a result.
Some of the mods were also poorly delivered for the car.
The cats were clogged and a de-cat was performed
The intake was restrictive and limiting the way the motor was breathing and a new intake solution was installed
So after all this I also installed a 4.10 diff, installed schrik cams (285) and a completely custom map the car is back (in a big way) and shows the ///MCoupe a clear pair of heels:bravo:
Point of this entire story is that most e46 ///M3's have been modified in some way or form... and many of these are poorly designed, executed or implemented and they often have the exact opposite effect to the performance of the vehicle... That and if grandma was driving it under 2500 rpm all the time its probably clogged to sh1t.
S54's are also subseptable to a build up of oil deposits because of BMW's slavish devotion to Castrol 10w50. It leaves heavy deposits in the motors over time that will have a negative impact on the Vanos and overall performance of the motor.
Later
Nick