I have to wonder how many Tesla buyers actually test drive something like an S550 or M5 so they can compare head to head the interior quality/comfort, speed, ride quality, handling, technology. I can't see anyone rational coming away thinking at that price the Model S is superior.
I guess if, as a matter of personal preference, you just like the lines better on the Model S than it makes some sense or if you want to be "green" or "trendy". I think the Model S is a good offering but just not at that price point where many autos of much better quality, comfort and performance exist.
As Tom C says right now the journalists have a love affair with the shiny new toy.
The Model S will have an advantage in some high altitude areas like Denver as the electric power does not need oxygen like an ICE. On the flip side in cold weather the lithium batteries suffer in their output.
The M5 vs Tesla drag video was in South Haven, MI by the way which has elevation of 633 feet (
http://www.usclimatedata.com/map.php?location=USMI0790 ). You will lose maybe 10HP to 15HP at that elevation on an ICE. Also of note would be the temp. Warmer weather favors lithium battery while cold oxygen rich air favors the ICE. As many point out it appears the M5 also didn't have traction control for that single run. I'd love to put my M5 with ME driving it up against anyone in a Model S at sea level and temps 75 or lower. Not that you need these conditions to pull ahead of the Model S but it will exaggerate even further the performance of the M5 over the Model S.