If it helps OP I was in exactly the same position with my M. Everything else about the car was great - the options list was long, mileage low and it was very good condition compared to others I'd seen and the price was right. It had the 1200 service but then hadn't had an oil service for almost 3 years. On an M people will probably say that's about the greatest crime there is.
If it was average mileage and average options then I would have walked away as most people have advised you, but I wasn't going to find another with the same spec at the price quite as easily. When I posted on here at the time people's advice was that it wasn't a massive problem, and I haggled some more off the already good price, so I went ahead anyway.
I know I might have issues come resale time but I also know that BMW will take it back. That said, you never know when they are going to tighten up their policy on these things so you could find yourself not being able to give it back to BMW even.