I didn't realise you guys only got RS models that recently. S and RS have been around as long as I've been buying cars, as far as I can remember anyway
S was always the poor-man's RS and up there with the top end V8, non-AMG Mercs but BMW never seemed to bother pitching at that level.
Back in the days of the E46 M3, we always had the RS4 with a 380bhp blown V6 and Quattro as the direct comparison and, being German, I'm sure that was truly the case from the manufacturer. When the E90 M3 came out, it was bang on for the 420bhp RS4 of the same generation and the S4 had 340bhp. I'd say it was roughly around this time that BMW first started trying to bridge the gap by turbocharging their top end 6 pots with the 335i but even that wasn't really a competitor to the higher specced and more expensive S4.