If you have a 74-77 tach, there is some chance the BMW ECU will drive it. It won't hurt to give it a try.
I had exactly the same thoughts, early on. I think a Honeywell 1GT101DC Hall Effect would do well, mated to an aftermarket speedo. That was my original plan, since I had intentions of using an aftermarket ECU. However, it may be troublesome with the BMW ECU. In my M3, there are a couple of obvious speed related 'things' going on... speed sensitive stereo, speed sensitive wipers, and gear based rev limiter (which uses info from the VSS). Obviously the first two are irrelevant, but the third item would be affected if the pulse count was off by much. Also, I can only guess at all the EFI related variables BMW may influence with the VSS. It's not something I've researched and it may be nothing to care about, but I would look into it before pushing the ignore button.