It's a tough choice, with both options having their merits and detractors... I've been in the same situation as Scott ( SABBAi ) and driven my car 3 hours home from Shepparton with my external wastegate held onto my manifold with a piece of coathanger, and have driven home from Morwell with no first gear or clutch. Both were not fun! That is the danger of having a daily as a track car, let alone the possibility of binning it completely, but the positives are that it's cheaper, much easier to get around, you'll get a heap more use out of it and won't be tempted to do silly things with it as you know you need to drive it on the street.
Having a dedicated track car lets you go wild on it as no street compromises are required which is great. Downside is cost, storage space, and getting the thing from A-B. When I need to go get a wheel alignment it becomes a 3 hour ordeal instead of an hour in a street registered car. It can be a massive pain in the arse, and I sometimes think I should've kept rego on the car for reasons such as this. But I also like knowing that when I go to the track and have an issue with it I can just put it on the trailer, park it and worry about it when I get the time/inclination.
As for your choice of car I think an S14 is excellent if you do decide to go that way. Quick, reliable, lots of parts around and cheap enough.
Disclaimer: I have driven my car a total of about 45 minutes in 3.5 years so don't listen to me