I think the market cars like the M5 and RS6 are after is the high end luxury market, not the "sports cars that are luxurious" market.
Basically there's a finite amount of luxury you can cram into a car... I mean once you've got an interior like the M5 or RS6 has, the next step is just gold plating everything so it costs more.
So instead of that, they just make the cars faster and faster. I don't htink they're pretending to be sports cars necessarily... it's just now Joe Schmo can say... "yeah my car's as nice as yours, but mine's twice as fast".
Any real sports car with just half the power would kill 'em on a track, since a track isn't where the M5 and RS6 belong. They belong in a rich guy's garage getting washed once a week by the "help".
Now then, when I get my STi Legacy with 450hp and a luxury interior, I'm putting it on a weight reduction and turning it into a fast-ass trackable daily driver. However, I have no pretences that it will ever be as fast as an Impreza could be. But I plan on having a dedicated track car some day anyway.