Its the design, distinctivness and heritage that keeps Alfa above the surface, IMO. We all close our eyes to some things, just because of the way they look and feel.
Good point on the MiTo - really furious little thing that looks good.
I am really happy with 147s handling, for instance - its really nippy and feels a lot way better than most hatchbacks out there. But, any time I look at BMW 1 Series, I cant help myself thinking what it would be like if Alfa made 147 RWD? I wouldnt just be beautiful, it would be a real drivers car. I think I am on the right track what Alfa lacks.
Not to mention the 159 being RWD, or Brera....
About seriously quick, I remember that at some point there was a 156 GTAm version as a prototype, that was supposed to have a bored to 3.5 Busso with 300 bhp and a limited slip diff. Maybe it woudnt steal M3 market, but it sure would put Alfa side to side with it and give the brand a boost.
http://www.italiaspeed.com/news_2002_135_02.jpg