It sounds like you’re pushing full-car respray at that price point.. I haven’t seen the damage on your car, so it’s hard to say what you should expect for cost.
For comparison sake, my wife’s E90 (non M) got a pinch in the corner of the front bumper that could not be popped out without destroying the plastic, so we took it to a body shop in Redwood City that replaced the bumper cover completely and painted it to match the exact shade of the car for about $950 out the door (sparkling graphite metallic). The did a nice job and it looks perfect. That said, I’m hesitant to recommend this particular place, since their more recent yelp reviews have been consistently terrible. I had the work done back in 2007, so it’s entirely possible that they have changed for the worse since then.
As for body panels things can get expensive very quickly if they need to start replacing metal work. And the area that you need to paint grows since they need to go to the next panel for blending purposes so you don’t see the work. My wife’s E90 (again) got rear-ended a couple years ago which necessitated replacing the rear bumper and energy absorbers, the trunk lid, the lights, and all the associated bits (emblems, weatherstrip, etc). Plus it had to be be checked to make sure the frame was still square. Since the other guy’s insurance was paying, we had BMWSF/German Motors Collision do the work, and it came to $4900 (full-on dealer pricing, there). The end result is gorgeous though-it looked brand new when all was said and done. It was a pretty large repair compared to just replacing the front bumper cover though, so that might give you another data point to consider.
I’m kind of surprised they’d recommend replacing panels for a deep scratch.. is your metal actually folded in at the scratch?
Another thing to look into might be paintless dent repair if you have dents that don’t involve scratched paint. Some of the people who do that can work magic massaging the dent out from behind it, and you can’t even tell that there was a dent afterwards (and it tends to be extremely cheap compared to any repair work that requires busting out the paint gun)