I'm sorry but you are comparing wrong cars, the red Z3 in this photo, is a 1995 4-cylinder, with small air induction front bumper, narrow rear fenders without roll hoops and many other things. In other words you compare a very old and poor Z3 to a 2004 BMW Z4 3.0i.... If you see a 6-cylinder 2.8 Z3, or a 1999-2002 facelift Z3 3.0i or a Z3M roadster you will understand how beautiful they are despite their age. For me it is far more beautiful than the Z4 and of course i will agree with Attila, for those who know from BMW's it really is a mark model for the company for many reasons.
BMW Z3 1999-2002 facelift
BMW Z3 2.8 Roadster 1997-1999
BMW Z3M Roadster 1997-2002