It's all dependent on cost. If he doesn't have the money right now he should just put a pipe in place of the cat. You forget to mention that cars today are incredibly efficient, and aren't the 454s of the 70s. I know that a well maintained Taurus SHO without cats is able to pass emissions tests in almost all states. I do think he should eventually get it fixed right, but if money is an issue he should just take the easy route for now.
EDIT: So you're saying that I don't care about nice cars and clean air? Sir, you need to learn how to be respectful here... I DO care about clean air which is why he should get it fixed right if his budget permits. Saying I don't care about "nice" cars is also quite misinformed. I am on this board because I care about BMWs and their advancement. Think before you speak next time in a public forum... I know about the O2s before/after the cat. They are a good idea ineven further reducing emissions. If The ECU in the BMW may compensate for inaccurate readings from the rear O2s, but as a temporary fix I doubt there will be any real sigificant problems.