To be honest i have always thought of sticking an M badge on a non, even one marked as a sport package as as wrong. Had a long thought about it and realized that if you have a M pack on why not. The M pack was developed by BMW's M division and therefore theres no harm in sticking an M badge followed by a 335i in this case. I mean its not hard to differentiate between which one is an M and which one just has the M package.
To support this point look at what Mercedes are doing. They are sticking AMG badges on c180 Kompressors that have the AMG kit on it. They totally "sticker bomb" the whole car with AMG on the wheels, door sills, steering wheel....
So sure man why not. If your a purist and believe only the M1, M3, M5, M6, X6M and X5M are worthy of the blue, turquoise and red badge then thats cool. If you have a M pack and you wanna show by putting the M badge before it, cool.