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Then why do people care to differentiate their BMW M3 from a non-M in the first place? If he wants to look like he has a more expensive car (for prestige? for intimidation? For irony of those that do it for the former two reasons?) who are we to argue? Go for it.

I'm currently debadged, only cause I've been too lazy to go back to the detailer to get it put back on after getting wrapped. My OCD would prevent me from reperesenting the car as anything other than it is (either up or down), so imowild do it. But if someone else wants to, go for it.
He can do whatever he wants. The car still does not define who he is. Regarding your question about the M-series, the same applies for those who wish to make it look something it is not. Self-esteem is not improved by pretending to be something you are not. Some would argue it does more damage than good. Like I said, he can do whatever he wants.