Chrysler brings back the Dodge Dart

That twin turbo BMW is in the $40k range and not where the Dart is going to be positioned. Dodge is not targeting the small luxury coupe segment. The Dart will be targeting the intermediate Ford Focus segment (low-to-mid 20-ish price range). Building a coupe to compete against the Toyota-Subaru FRS is one thing, but it's another to compare it to a BMW that's not even close to it's price range.

Well the thing is though, the twin turbo 1 series is the top of the line model in the BMW...
you can get a base model 1 series for 31K... Dodge could easily make something that competes with the Toyota/Subaru (rumored to start between 23-25k) and the 1 series and I think they could reasonably do it for around 23-25k as well... especially considering the full size Charger starts at 25k.

And it doesn't have to be "Luxury", it just has to have perceived value (overall package: design, performance, mpg, interior)... And with the way dodge has stepped up their interiors lately, at a 25k price range I'm sure they could put something together that looks pretty damn good.