To reiterate a post I made in the 1 series forum:
The first car to wear the "M" livery was the 2002 Turbo in 1974. It had a powerplant out of the 2002tii, with lowered compression and a KKK non-intercooled turbocharger. It was not a bespoke engine by any stretch of the imagination - just a regular production engine with a few bolt-on bits of forced aspiration, suspension parts, recaro seats, wheel arch extensions, and a different gauge cluster. The second was the M1, which was, indeed, a bespoke engine. Then came the M535i (NOT the same as the M5), which was also not a bespoke engine. The American-spec E36 M3 and Series 1 Z3M Roadster both had the 240 bhp 3.2Litre engine that was a modification of the 325i/328i engine of that era - M50 I believe - and that wasn't a bespoke engine, either.
The 1 Series M Coupe (try saying that 3 times fast!) may have a "production" engine, but it's been tuned a la the Z35iS. It sports different suspension, fenders, front and rear air dams, brakes, and a true mechanical diff like all good M cars should.
As someone else said, these cars are "more than just the sum of [their] collective parts". An M is distinguished not by simple 0-60 times or braking distances but by an overall purity of balance, performance, and handling that isn't found in lesser models - no matter how many mods one puts on a base car, it's never quite an M unless you go to ridiculous lengths to get there, like installing a mechanical diff, getting rid of that awful electric steering, etc.
I, for one, am putting my name on the list for one of these as soon as possible - couldn't imagine a more interesting and current interpretation of the M philosophy. No, it will likely not be as raw as my E85 M Roadster or TheKurgan's E86 M Coupe, but given the emissions and pedestrian safety regulations with which new cars need to comply, it may be the closest thing we're going to find to the M philosophy in the years to come. I love my car, but it's three model years old, using technology that's eight model years old from the E46 M3. If we expect progress in other areas (safety and reliability being primary among them), we'll have to expect a little bit of generic-ising across the model range. Whilst the 1 Series M coupe doesn't have a coach-built engine, it will hopefully also NOT need valve shims every 20K miles or other heavy engine maintenance as our older, normally-aspirated, "race-bred" engines do.
Another small point - the 1 Series M Coupe, I'm told, weighs about 77lbs LESS than an E36 M3. Perhaps it's not so heavy after all.
As Colin Chapman said, "First, add lightness".