The x5M and X6M share the same basic engine block with the 750's engine, however there are quite a few differences. For example: the M versions of this engine have different and larger oil coolers, larger and completely different turbo chargers, etc. Although Alpina did some similar changes to the 750's engine for the B7, the majority of the gain is probably attributable to software tuning. I'm sure you could push 600hp if you really wanted to, but from a reliability point of view, I'm not sure if that's such a good idea. You have to also keep in mind that this is a different V8 setup with the exhaust in the center of the V which means that the heat is a LOT higher within a given space under that hood than normally found on V8 engines. Also, have a look under the hood of the 750 and see how much space for air flow and cooling is left. I am still amazed they were able to squeeze the 6.0l TTV12 in to that engine bay!!!
I don't think it is a policy issue that Alpina is not 'allowed' to push this past the 760 V12 mark. I think it's a matter of balancing performance with reliability (as well as cost to a certain extent).
I wish they would bring the AWD version to the NA market sooner too... It's not hard at all (or should I say it's way too easy?) to make the rear wheels spin or break out on a regular 750 if you tap on that accelerator a bit harder than you should
I think there were rumors that Alpina might introduce a B7S based on the 760... now that in AWD that would be SWEEEEEET