Thanks for all the advice. Quite right, there was no 2.5 turbo Subie in '02, so it isn't completely over the top to trade in. Affordability isn't a problem - I could get the Legacy for trade in plus cash.
I don't totally dislike my Subie, it's a sometimes love/hate thing. It would actually be more logical to trade in the older Volvo and get the Legacy, which duplicates it's highway cruising capabilities more than the OBS does. If my wife could be persuaded to part with "her" Volvo, it would be easy to have the Legacy from my point of view.
The most prudent thing would be to just keep our current cars until they die, or maybe use the trade-up cash to buy a used truck as a third vehicle. A Tundra or even an F150 is much better than a station wagon for hauling firewood, tossing in three bikes for a short drive to a some great family cycling areas, etc.
But I've test driven a Forester XT, an STi, and recently the Leg GT Ltd. All a lot more fun to drive than any of the more practical options under discussion.