"Magazines compare the Z06 to 996 Turbo, not because of the luxury content, rather performance."
But that is because they are strict performance vehicles!! The GTO is not a strict performance vehicle. If the Mustang was to be compared to a BMW, it would be compared to the BMW M3 because both are strict performance vehicles. However, the GTO is often compared to higher end BMWS (C&D even compared the 4 door Holden version to the higher end M5) because those cars aren't strictly performance cars. They are about performance-luxury like the GTO.
If someone were into straight performance, and wanted a pure performance BMW, they would look at the M3, not the M5. The reason C&D comapared a Holden to the even higher-end M5 is because Holdens are supposed to provide a modicum of comfort too.
And again, I am not saying that the GTO is a luxury car. I am saying that it is a near-luxury car. The reason I am bringing this up is because you keep on saying I refer to it as a luxury car. No, I am saying that it has a modicum of luxury to it (hence the "near luxury" label) and thus, when it is compared to high end BMWs and MBs, it is often compared to the ones that provide comfort too, not just the out-and-out performers like the M3. If anyone was gonna compare the Mustang to a BMW, it would be the M3, not the M5, because of the Mustang's performance oriented purpose.
"The price of the 2 cars is also quite similar."
The MSRP of the GTO is $8K more. The GTO is also made to carry four people IN COMFORT unlike the Mustang.
Sure, you can buy a 2004 GTO with rebates for about the price of a Mustang, but that is just because the Mustang is new. In 2 years, if not by the end of the year, the bottom-end Mustang GT will be a near $20K car. You gotta keep in mind that the Mustang is a very high volume car (150K projected sales per year) so it will have rebates as well. Virtually all Fords and GMs do, and that is why they are far better cars for the money than the Car Mags portray them to be.