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I think Volvo tried to go too cheap with the S40, and they don't seem to hold up as well as the larger models from the time. Volvo shines at making large wagons, but those aren't much fun either.
The thing is, when you make a smaller car like the S40, people expect it to be fun and handle well. So I can see why you were unimpressed.
The 9-3SS (and A4/3 series) probably was more directly comparable with the S60 in terms of size, weight, build, price etc. That said, S60 is still not a super exciting vehicle.
Honestly, I'm not sure what we'd replace our 9-5's with... the wagon especially is a great combo of performance and utility.
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