don't trade in your B8 yet - it's a tuning platform
Audi had a campaign in 2005 called the "sum of the parts challenge", in which you'd collect parts from ads around the Internet and possibly win an A4. At the time I was in the market to buy a new car, and BMW unexpectedly offered a silky new inline 6 in the E90 starting at $31k that by all measures was superior to an e46 ZHP car so I quickly gave up my lust for a B7 2.0T. That was a fun car to learn on with its measly 215 HP. The 3 series is much like an A4 in that most of the factory parts (except for the engine and transmission) are completely inadequate for track duty and need to be gutted off of the car. It raises an existential question about what a 4 door German sedan is, and I want to assert that it's a platform for a fantastic sports car with both street and track capability.
The automotive press pounds into our heads that the M3 is the benchmark but I see it as merely another data point. It shines a bit brighter than a Scion FR-S or a Subaru WRX or even a Boxster. Lots of weekend HDPE attendees take a "track capable" M3 and strip the brakes, wheels, tires and suspension out of it with the first 24 months of taking it on a road course. It's because the parts were cheap and designed for driving to the grocery store in snow and salt. They have a one-time-use track capability but no long term durability. Take it on track for 10 days and all of the parts are ruined. The OEM replacement cost is high so we turn to the aftermarket.
Forunately OEMs are offering some high end durable parts, like carbon ceramic brakes. Unfortunately that's a $10,000 item (including the requisite, dependent options like larger wheels).
Starting from first principles, there's nothing wrong with choosing either the Audi or BMW 4 door sedan chassis. Neither chassis shines brighter than the other and boast equally competitive torsional rigidity and near identical dimensions and shell weight. Thankfully, the platforms are differentiated in drivetrain. You can have the legendary grip of quattro, or the legendary sideways "fun" of a rear differential equipped BMW (though often that fun factor end in an expensive car wreck over time). So there is a clear difference between a BMW and an Audi, which is good because everything else is more similar than different. After all, they both source all of their parts from the same suppliers - Bosch, Siemens, Brembo, BBS, Zeckenhaus, ZF Friedrichshafen, etc. The marketing bias burned into our hive mind is strong and you need to overcome it individually to continue reading this.
The F30 brings some interesting innovations like a lithium starter battery, a bunch of tricks to save fuel like turning the car off when it slows down, and liberal use of plastic body panels that save 2 pounds over aluminum panels. I'm going to assert that you can make your B8 stop just as well an F30 with CCB if you graft the RS5 carbon ceramic rotors onto it. We all know the rear breaks play a weaker role in stopping the car than Steven Segal did in his 3 minute cameo in Executive Decision.
There is no reason you can't replace the 65 pound lead acid battery in your B8 with a litium starter battery. You can even wait the full 4-6 years for the original to expire before replacing it. You can bolt any "innovation" the new M3 has onto your S4, where it matters to you. I know these things are expensive but most M3's on dealer lots are quite expensive, because some parts like this are expensive. The ///M is a good package but one that blends in mostly street/lux features and fewer track features.
The M3 is a great car but you need not trade in your S4 to have equal capability. If you've done some work on your S4 brakes/suspension/wheels you might be regressing getting into an OEM M3, as it really is just a shell with a turbo 6. It's a blank canvas. If your S4 is not modded yet it's also a blank canvas. If you like quattro and your transmission, keep it and modify it as need be.
2015 Boxster 2.7L PDK, white, radar cruise control, dynamic headlights, HRE FF-01 in gloss white, PSS
2010 Audi S4 6MT, JHM Clutch/Flywheel, REVO pulley & tune (370awhp on Mustang dyno), Brembo BBK, APR CPS, BBS CX-R, Pilot Sport Cup 2