Mike,
I was totally in your camp "Why do a V8, I don't need that much power" until I went for a ride in one. Getting back on the freeway with my 2.0 right afterwards, I sadly discovered that the original engine was not going to cut it...
I use my 327 914 as a daily driver, I'm not punching it everywhere, but the torque on tap at low RPM is really cool. Corners like my old Spitfire or Lotus Europa, goes like my cousin's '67 Camaro or my ex-girlfriends '82 4spd Corvette.
Without going to the scary end of the spectrum (your wallet will warn you if you slip in that direction), I've never driven a car that had too much power. Like I've said, some of the modern alternatives, Raby or Suby, should be sufficient, but around 200 ft/# of torque under 3000 rpm is pretty enjoyable.
