StreetPro

1- larger rear are only for looks, so they look the same as front ones, check it out yourselve... heavier (larger) ALWAYS hurt accel or deceleration, dumping rates or even turning (imagine you have spinning more monentum-gyro effect)... remember dragster are using LARGE tires (hoosiers) because of traction, not low profiles as above suggestions
2- staggered setup results in UNDERSTEER (car wont turn in so easily, because of wider rears have more grip), assuming you put on wider tires as well
3- on e60 with RWD only, you may use different sizes of wheels-tires, it wont give you any hard time, just make reset of RPA (flat tyre check) system

Diamond

still doesnt really answer my question as far as why they use a larger diameter tire in the rear compared to front-so that the overall diameter of wheel/tire is larger (taller) tires on the rear.

It means the fronts spin so many more revolutions per one spin of the rears-dont see a purpose of that

StreetPro

1-well another + of this setup is to get the rake and hence make your underfloor act as a huge diffusor (in case you have a smooth undertray)...
2-this way you get the same tyre profile so ride comfort is equal (otherwise it would be much harder and bumpy comparing with front=more oversteer)

525iEnjoy

Cornering stability...running a wider rim on the back promotes that, the 18's arent really small on the vette( 275/35) um 18 help with turn in and also allow a wide ratio tire with out going to a bigger rim.

Example: 275/35/18 or 19

You could run that matching 19 upfront, with 18's you get a better offset with a inch less rim width, less radius, less circumference, and overall diameter

Now bmw chooses just increase the rim width in the rear for a staggered setup instead of having two rim sizes. probably a cost factor

All cars have understeer its a safety issue. Even the V8, 10 and 12 cars have some built in.

edkwok99

Larger diameter in rear will reduce the wheel gap.