I went through this though process, but ultimately decided on the 3:
1/ I've never spent this much money on a car ($50K)... hard to contemplate spending another $20-$25k
2/ I've never had a car as large as the S (I've test driven, and it's noticeable to me)
3/ Depreciation will be worse from a $$ perspective even if %s are similar
4/ I thought about other things I could do with $20-$25k... get solar panels, buy some index funds, etc.
The flip side is that the S is more nicely appointed and drives better (in a straight line). I don't know what they did with the suspension on the 3, but I still find it a bit too bumpy/harsh (my benchmark here is BMW E46/E39 with sport package). The S seems to be much smoother, but again only in a straight line... I don't really care for how it goes around turns (where I can definitely feel the size).
Parking the 3 is a breeze. The S isn't bad, but I do have to concentrate more.
Last thought is that the S has to be due for another refresh soon. It's been largely the same since 2012 when it first came out (newer seats and nose not withstanding). The 3, despite it's spartan interior, feels fresh and also has better ergonomics (window switches, arm rest, etc).