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Smaller, lighter engines = lighter car. So the same HP gets you better performance, to boot.
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Simple V8's don't weigh much anymore since they're all aluminum now in performance models. All the technical gadgets thrown on to other engines to make them get high power/displacement ratios make them heavier. The real world advantages are small if any:
"Old" tech:
5.7 L LS1 or LS6: 350 or 405 hp respectively. 400 lb long block
7.0 L ZL1 (1969): ~5-600 hp. 500 lb (very few were originally built, but all the parts to make a new one are easily found).
New Tech:
3.4 L 1998 911 Carrera engine: 300 hp.
400 lb
3.6 L 1995 911 Turbo engine: 410 hp. 600 lb (!)
I'm can't find M3 or Supra engine weights, but I doubt they're much different.
You also bring up the physical size of an engine, which I don't see as being much different for any of the engines you mentioned. RWD cars mount their engines longitudinally, so underhood length, not width is most important. Both the supra and BMW are inline 6's, so they require similar space to a V12. Not exactly compact.
I admire the engineering acomplishments on european and japanese engines, but I'd admire them much more if they applied the same technology to a larger displacement engine. Turbos are also good though
