My car is debadged, because - well it was in the showroom...
I am German by the way and I actually don't mind either way:
1) Some people debadge because of the cleaner look
2) Some people debadge because they don't want people knowing what they drive...
Before my 5er, I had a 120d (fully loaded though)... I left the badge on - I am quite alright with people knowing that it's "middle class", neither top of the range, nor slow.
However - it was loaded with features and actually more expensive than a basic 123 / 135 (top engines) - and that's why showing of the engine badge, is rather pointless either way.
My 520d could well be a 530, the exhausts are the same and unless the engine is running (and you're an expert in the noise difference), you wouldn't know. As a friend actually said when I told him "it's only a 520" - "Oh, it looks like more!", while just last week a british colleague thought it was a 3 Series...
I am also fine with that. I know people that not only debadge their 550d M, but even swap the mirror covers, so that people can't tell what a powerful (and expensive) machine it is.
Unfortunately, particularly in Germany, there are plenty of jealous people.
Driving a brand new M or something like that to a customer is hardly acceptable and you never know who's going to key it when you park down town, simply because they can't afford it.
In some countries, people will be happy for others driving nice cars, in Germany however, rather than thinking "If he can afford it, he probably deserves it", a more common thought appears to be "Why can he afford it, and I can't?"
Sad, but that's my opinion and experience. - So for me, people don't need to know whether I drive a 520, a 550 or even a 5 Series - they can tell it's a nicely equipped BMW that probably cost a few bucks, but that's sufficient.
By the way - has anyone on this board ever been to Saudi Arabia?
What I found absolutely ridiculous, is that 75% of the cars still had the dealer sticker in the window (!)
I am still not sure whether that's to show off (my assumption), or people actually care so little about there cars, they consider removing them a waste of time...
Finally, to respond to Dave330i's cultural observations:
Germans are not necessarily private people, but they usually take some time to "warm up" - and they generally mean what they say. Unlike some places in the US, where I felt you chatted with some stranger for 5 Minutes and they invite you to their home and what not (without actually meaning it), you wouldn't ever experience that in Germany. People will only ever give out genuine invitations, and typically show their "real face" in most situations - that's why our high streets are so messed up with store clerks "genuinely not giving a f*ck" (if you wait in line for example), while Germans than get totally confused that they have to repeat "I'm just browsing" every two minutes, because people keep approaching you when shopping in the states.... probably not really giving a f*ck either, but at least pretending to - Just considering that I've never been asked "How are you?" in a McDonalds in Germany, or probably any shop... why would they care? And why do Americans always give me a weird look when I respond that I am having a sh*tty day?
Anyway... You don't have to shake hands in a specific order and you're welcome to hug people (if you are genuine friends anyway) - you can also stop by, crash on the couch and ask for a beer - Germans are not really that different typically...