...if you could boost the 4.2L V8. You can't though for a reasonable amount of money.

Out of the box, I think I would agree with you, the 4.2L V8 would be enough for me, as I have a B5 S4 /w Stage I chip and it felt like everything I needed.

That said, I have a pair of K04's sitting down in my basement to be installed this weekend, which will make the big displacement V8 look like a slouch.

The arguments that people are making about the 2.7T being unreliable, really comes down to a poor choice of turbos for the S4. It would have likely been cheaper even if Audi went with the K04's straight from the factory.