There are no hard and fast rules when it comes to modifying cars - as far as going for the RS4-look, if you can afford the parts, the labour involved, but don't want heart-stopping B5 RS4 bills, why not?
I went the B5 RS4 widebody route, because I can, and like the look. I did also have a modified B5 S4 engine, complete with all ancillaries, ECU and harness. I chose to sell it, in favour of an S8 4,2L V8 engine. I've never liked the rear-mounted turbochargers of the 2,7L V6 30V, whereby maintainance of the units requires an engine pull - if you ever had to replace £0.89 copper washers for the turbocharger oil feeds, you're looking at a £700 - £1,200 bill for labour. A no brainer, as far as I'm concerned.
I think we make the mistake of thinking everyone's after a fast car, but not so - some owners go for a certain look, but have no desire to modify the engine. It's no different from a B5 A4 1,6 sporting B5 S4 bumpers, grille and side skirts. Or a B6 A4 1,6 with the DTM / S-Line body parts.
Bottom line is, there's no such thing as parts belonging on a car - as long as they please the owner, they belong there.