i understand were your coming from about the swap it seems that there almost no hope for moddin this engine but dont get me wrong there are times when the car can seem fun (anytime over 3600 rpms) but the power is just not enough....for me atleast
There is a lot of hope for this engine...a stand-alone & FI or DASC can make it do anything you'd like. It's the weight that's the kicker...an M52 is what, 100lbs heavier? On the front end? I'd hate to think what an M30 or M70 would do to the car's handling!
With some careful tweaking and the right diff, tires, etc, this car can do surprising things. Let's compare a '91 iS with an e36 M3:
e30 weighs 2600 pounds, has 140hp. About 19lb/hp.
e36 weighs 3300 pounds, has 240hp. About 13lb/hp.
Seems dramatic, doesn't it...but let's add a DASC & trim a few pounds of trunk insulation on the e30...
e30 still weighs 2600 pounds, now has 200hp. 13lb/hp. It'll probably still get >20mpg conbined, even with the way I drive.

You get the idea. Each foot-pound you squeeze out of the M42 is worth 15% more on our little motor, not to mention far livelier handling & braking...the car isn't for everyone but you can't deny your bang for the buck!