I think both the Mega Drive and Mega-CD versions have trade offs. Usually what's in one of them is missing on the other, and if you combine the positive aspects of both versions, then you would have the arcade except for color count and a couple of aspects missing in both like Earthquake and zoom out (add the SNES version to the mix and you would have everything, lol).
But it's true that the Mega-CD version recks inability/lazyness while the Mega Drive version seems to have more work put on it. Most of the aspects missing in the Mega Drive version and which are in the Mega-CD version, except for the redbook audio of course, could have been present with just using a larger sized cart/ROM. This can't be said otherwise though, the major issue that arise in the Mega-CD version are internal memory constraints which could have been solved using optimizations Funcom was clearly not able to do.
Still, I have always liked the Mega-CD version despite its setbacks, but the Mega Drive is the better effort out of the two. And one of the major issues of the Mega Drive version like the slowdown can be solved through overclocking, plus Pyron's color hack has fixed its drab colors up to level resembling the Mega-CD one or even better in some cases.
I think the best thing with the Mega-CD version would have been using the basis of Saurus' Mega Drive version while adding everything that was missing because of cart size (and of course the redbook audio soundtrack) or tasking the Mega-CD version to a Japanese developer (the logical thing to do back then) or a western developer which would have been better suited for fighting games, like for example the guys at Sega Interactive Development.

