i assume when you speak of a "newer" m3, you mean any of the 2000 + M3s.
i usually dont venture into this part of the forum, but, let me explain why it is hard believe and to beat an m3 with an itr eg hatch. its very simple with a few comparisons.
let me give you an example of my b16 eg hatch on an SC34 @ 10 psi 295whp/185tq on a conservative tune vs my brother's factory 04 M3 333bhp/262tq both on street tires.
1. on the track, the factory and heavy m3 pulls consistent low 13s. the boosted b16 pulls consistent mid to high 12s.
in order for the eg itr to even make it to 13s, it will not be doing it on street tires.
2. on the street the heavy m3 will always have a 2-3 car pull off the line or on a roll against the light but boosted b16 due to its rear wheel drive and 262tq. when the sc34 starts doing its job, the boosted b16 will be at least 2 cars ahead of the m3 by third gear with the m3 close behind its tail.
now, the m3 against the eg itr, that torque and rear wheel drive on the heavy m3 means, he will own you all day long.
maybe you raced an auto 96 m3
other than that, the next time you see a 2000+ m3 laughing at you, it means that he knows that his displacement and rear wheel drive is going to own you all day long
