I'm not saying it's the only or best way to reduce understeer, but I don't see any problem with more negative front camber to reduce understeer. Yes it will wear the insides of the tires faster if you drive mostly in a straight line, and at extreme levels more front camber will hurt straight line braking too. The OP could also go to a square tire setup (if he has staggered now). More spring rate and stiffer swaybars (which effectively give you more spring rate in turns) can do it. Though I'm curious why did you upgrade your rear bar but not your front bar? I hear a lot of E36 and E46 Autocrossers upgrade both bars, or if they have stiff enough springs, upgrade the front bar only, or een upgrade the front and remove the stock rear bar.
Irocthe325: I think -2.6 (I'm actually at -2.6, not -2.5) in front feels good. Perhaps a little less stable (more darty, more tramlining) in straight line driving on the freeway than the stock camber setting. Too early to say if I'm getting uneven tire wear. Probably depends how much time I spend cornering hard (which will wear the outside edges) vs. straight line driving (wears inside edges). I drive like grandma on the street (except freeway offramps) and corner hard in the parking lot (AutoX).