If BMW released the E90-chassis 335i as a standard car with the M Sport packaging, it could have been a real competitor to cars like the first-gen Cadillac CTS-V and second-gen Mercedes-Benz C55 AMG (notice I said C55 and not C63). At the time, both the CTS-V and the C55 AMG had pretty much no competition from other manufacturers.
BMW released the 335i at a good time, but it just wasn't quite right. It was a great car, but it lacked some of the features that would have made it a real competitor to the CTS-V and C55 AMG. It should have been standard with the M Sport packaging and released earlier.
It is pretty dang close to the B7 RS4 (and B8 S4) in straight-line performance, though.