I won't disagree with you, simply due to the perspective from which you're presenting it. Of course, you're also comparing a stock R to a modified 370Z. Modded an R is as fast as you've got budget. There are guys running 10's already, and there are guys going 1+ G's lateral on 255's, which fit fine under the fenders. You probably will be surprised when comparing the traction levels of an narrower tired AWD car to a wide tired RWD. It depends on what you're looking for and how much you want to spend. The all out built R32's of the past have been quite competitive on the track especially, and the new one still has that kind of potential. Don't forget that VW intentionally detuned and neutered the car so it wouldn't compete with the much more expensive TTS which is basically what it is under the skin. A few parts and a tune and you can add 100 hp pretty easily.
That said, the TDI is a great car, and you won't be disappointed. A good tune will really wake the car up too. A stage 2 Malone tune, for example is good for 45 hp and 110 ft lbs of torque, and you get better mileage. I've got one of each, a TDI for a daily and an R for weekend fun.