BMW made it's reputation with naturally-aspirated engines.
I had driven the N54 on a number of occasions (loaners for my dad and sister) and it just wasn't right to me. Also the heat under the hood after a drive terrified me. Sure it's an awsome engine, but it just didn't feel right in a BMW. (or at least not MY BMW)
Sure the 128i has less power, but it has more then the E46 330i did. And really given the speed limit in Ohio, I didn't need any more help getting tickets.