I think 8500 would be, in the best case scenario, pushing your luck. It could hold up drag/highway racing, but I think on a road course you'd have issues. The Procar m88 engines revved to 9000rpm but
they were rebuilt after every race. If I built one of these engines, I'd probably keep it under 7.5k for peace of mind. Possibly blowing a ~$10,000 engine for a few extra rpms doesn't seem worth the risk to me. Then again, maybe the available aftermarket balancer works wonders and would soak up 8500 rpm easily.
I do not know for sure, but I think the s14's stock valvetrain is what limits its rpm potential, which is why BMW kept the red line at 7000. Upgrade the valvetrain you're good to go; the s14's crank is much shorter being a 4 cyl so it doesn't experience the same issues with vibration.
Ok i respect you. 8500 rpm is not 10k rpm though but the point is bmw was conservative.