Its a tough issue becuase my heart agrees with you that you should get a brand new car, but my head says that a replacement is not warranted as long as they have fixed the problem. They have no legal requirement to replace the car.
Your sensors could have failed in three years time which would have cost you a lot of money so at least it happened now. As long as they have diagnosed the problem and fixed it and your car looks like a new car, then really that is all that they can do. If BMW Australia wish to replace your car, then that is their decision but your dealer can't make that call themselves. It would make no difference whether it was your 320, or a top of the range 7 series, the same rule would apply.
Those people whose Ferraris exploded reecntly hopefully got their cars replaced, but all of the other owners who's cars were yet to blow up just got the defective parts replaced.