I'm afraid that this just won't cut the ice. Basically, it's VW's answer to the emission and consumption restrictions troubling the Golf V R32 engine - NOT an answer to the competition, or the spirit of the times for that matter.
Due to VW Group's canibalisation paranoia, we don't get an engine that is sufficiently distanced from the 210hp engine of the GTI (so that the S3 and the new Leon Cupra won't feel the heat). The exterior is moderately changed and quite succesfully at that - but then again the starting point was boring. The interior is quite uninspiring and not differentiated enough from the 'normal' one.
I do not doubt that the car will be great-to-superb on the road, but this is only half the point. At least competition will be forced to answer back soon - and this can only be a good thing.