I prefer the SMS to the NES, but not by a lot. I currently own exactly 35 games each for the two systems, but my SMS want list is bigger.
I find a lot of NES games to be pretty overrated. Like, I thought the first Castlevania was kind of crappy (I do like 2 and 3 though); Master of Darkness is much more fun. I found Dragon Warrior 1 to be god-awful, Final Fantasy 1 to be a snoozefest, and I still don't get what people see in the old Mega Man games, which I consider stiff and cheap. Games like Metal Gear and Adventures of Lolo may be interesting for the time, but they just don't play well IMO.
And indeed, the vast majority of games that were on both systems were better on SMS. Shinobi, Alien Syndrome, Choplifter, Bram Stoker's Dracula, California Games, Wonderboy/Adventure Island (they're the same game), Jurassic Park, etc.
As for controls, I agree that the default SMS controller isn't great. But that's why I'm thankful that it uses the Atari 9-pin sockets, so a lot of different controllers are useable on it (Genesis, Atari VCS/7800/XE, Amiga, etc.). And I think Genesis controllers are way more comfortable than NES. Some games are picky about which controller you use, but it's a very small number.
One other thing I like about SMS is how much better the boxes are, and how much easier it is to find all your games complete. On the SMS it's relatively easy to restrict yourself to only buying complete games, but on NES it's not worth trying.
Bottom line, it comes down to the games, and personally, I think SMS had a smidge more of the good stuff.