BMW M is challenged because I think there is another very good reason they did not want to build this car with MT - the turbo lag.
In the DCT model it is not very noticeable because you are not controlling the gear engagement, a computer is. But, with the MT you feel it more, especially on the gear down (engine braking is delayed). I feel that M engineers have tried to over compensate for the turbo lag on the launch of the car so as to have immediate power, but when you try a throttle blip to rev match a deceleration, the engine is still very high strung and does not climb back down as fast as an NA car would. In a weird way its easier to rev match, but you need to get used to driving around the Turbo. I believe that this is the reason that DCT is not rev matching in the V8TT like the V8 NA in the M3 - its the nature of the engine.
The clutch was softer than my 911, but all BMWs are in general. It's maybe a little too soft for an M, but great for downtown traffic. The shifter was very nice, short, fast, and smooth. Like others have mentioned, it does have that slight rubbery shifting feel but I kind of like it as more of the car is vibrating through your hand almost like holding motorcycle handle bars (I guess). The feathering of the engine (something you can do with a clutch) was just so awesome. The back pressure kicks sound like a massive drum being hit inside the car - I could do it all day!
Overall I am sold on the M5, I think it is very different than the race inspired E60 with its V10. A BMW exec goes on record as reminding me that this car is not so much about the engine, the brakes, or any one singular thing - it is about the package. For this I believe they have achieved their goal. I will go on record as saying that this is the best 4 door sedan dollar for dollar, that money can buy. It's a whole lot of car for what they are charging us. Now, there are trade offs for this package; things like exclusivity, unique engine, etc. but if you are in the need for a super saloon that goes from couch-like comfort to a hooligan ride, then this your pick. For me I am checking off the MT box!