I've driven the 328 and the civic back to back on a regular basis and can confirm on a straight the 328 is quicker but not by much.
I was reading through your post thinking "most of what he is saying is pretty much spot on", but this made me laugh. Talking about your car as "stock", the 328i would leave it for dead, straight or twisty. I cannot comment on modded as I haven't driven your civic, but I do wonder what the same amount of cash thrown at the 328i would acheive, heck £25 will get you 20bhp.
So back on topic, fox - with regards to the comment about me not being a good enough driver. I don't claim to be any driving god and am infact far from it, i'm a big car enthusiast and know the theory of car handling very well i'd say but in practical i've not had enough hands on experience at the track.
Unfortunatley, theory and practice are two completely different things. I know many many people who couldn't describe why a car can do what it can do, and why setting certain geometry aspects change the handling in such a way, but throw them the keys and they would show you what the car is capable of.
So you are probably largely correct, it is very possible that i do not have the skill to bring out the potential of the rwd 328 and have a bit of a skewed opinion. On the flip side i have been out in 328's with other drivers. The car felt even more 'smooth' and not as 'thrilling' in the passenger seat as it did the driver seat.
Come out with me in my 325i and I can guarentee you that it won't feel "smooth" in the slightest. The e36 isn't a particularly refined car, and when being pushed hard, you CAN feel this, through the pedals, the wheel, and your ass.
I take back my comment on it not being fast enough to get you into trouble, i think the smoothness of the car and lack of throttle response just makes me think it's a lot slower than it is. Hopefully one day i'll have the skills to bring out the potential and see for myself if it's really a much more capable machine.
Lack of throttle response? Are you SURE that the one you drove wasn't broken?