I came from a 335i to a 135i. The 335i was not the 'iS' but it was Cobb tuned and PE'd. Lovely car to cruise in but needed modding suspension wise to get it to be a fun drivers car, I actually traded for a 135i to get back that drivers car feel and besides the slightly uglier looks of the 135i I haven't looked back.
Basically what I am saying is that by buying a 335iS you aren't trading up in terms of performance but in terms of interior feel and ride comfort it's an improvement. What'ya want from a car really?
Even though FBO 135i is faster than M3 i'd have no question about a trade for a good low miler, it's ///M after all
