Actually, reading through all this again, I agree with the Sport vs DTC button comments. Switching on Sport could result in shunting someone in the back end in slow traffic due to unexpected throttle response, but even racing around back roads the electronics will 'save' you from any serious mishaps within the bounds of physics, assuming some care. Switch them off - the DTC button - and an inexperienced driver could very easily write off the car without even trying, irrespective of whether Sport is on or off. Sport might just make it happen at a lower speed, which could actually be a good thing, damage-wise
Seriously, this is a 3.0 , 265bhp RWD sports car we are talking about, not a FWD or 4WD sedan - if the guy can't be trusted, as this question implies, then your friend has 3 choices - potentially let the kid find out the hard way with your friend's money, get a smaller engined version (still a high risk), or don't let him drive it.
Check out this thread and the vid on page 3 or 4 that shows what can happen when you switch the electronics off - ok, it's an M, but the guy is experienced, driving reasonably fast but not stupidly, and even though it doesn't look too dramatic the car was written off :
http://www.z4-forum.com/forum/viewtopic.php?f=9&t=31651&hilit=Killed
EDIT - sorry to Z8cookie for resurrecting your pain

figured it was a cautionary tale worth sharing. Not even sure you had the electronics off looking back...