TBH its not that they aren't quick. Even by todays standards sub 5 sec is quick IMO.
The thing that has changed is the way power is delivered and unless you can have 150% throttle and pinned back in your seats in any gear its seen as slow in these turbo days. But not necessarily fun.
The market is telling all you can get a 3YO M135 for 15-16k but your looking at a 100k Z4M C for the same price...
I haven't really experienced this sort of power yet apart from my 15 Mini Cooper S (which btw has had two engines, gear boxes and clutch/flywheels in 11k miles.... so if your thinking of buying one don't because they are mechanically s**t and desperate to get rid)
Its not stupidly powerful but its great fun to drive power in every gear but its not overly rewarding. Ive never commuted and my Z4M C was purely a fun weekend car but I ended up driving it about 6-8k a year regardless, mostly for fun, my job was a 5 minute walk.
Ive just moved to Manchester and now I need something to commute in, so a turbo auto is on my horizon simply because in traffic they are so much easier to drive the older M cars. They are a nightmare I would have hated to commute in my M whereas a 35i will be quick comfy, GTish and will still be fun for the weekend with the top down. Although I have grilled them in the past, for an all rounded car you can't do much better from what I've seen on the market currently. If it were purely for the weekend then something like the M ticks all boxes and I wouldn't hesitate.
I think another reason is that all these newer cars like the M135 M235 are more capable all round cars that your less likely to wrap round a tree and can carry a kid and a load from IKEA making them great. They are half the cost in tax and servicing and are very reliable. While moving house we used my gfs Clio and its been fantastic for fitting everything in! got a 6ft mirror in it and comfortably drove down whereas in the M or an E89 I would struggle to get two suitcase in. This makes these high performance hatches really a great option.
For me the older days of 'hot hatches' was a bit of disappointment. When I passed my test the MK5 Golf GTI was all the rage but the price bracket for me and my friends was the MK3 and was probably the worst ever made. They weren't overly quick with the little engines and the insurance was insane, whereas the M cars were about the same to insure for me and had about 150hp more which is why I ended up in one.
Now these hot hatches have 6cyl and over 300hp and I think its made the market a much more exciting prospect. But what is missing is the special nature of these cars which you don't find in anything but the race derived M cars.
At the same time being a prospective buyer it completely puts me off buying another M car because they have all gone into the stratosphere in terms of price. They are over 10 years old most have high milage and you will need to spend money to protect your investment making them pretty unattractive. The thought of spending 18k on a 53 plate M3 with 70k on it or 15k for a 100k Z4MC is just bonkers IMO have to be desperate to have an M experience to buy one.