Eh, the problem with Sonic CD is not which soundtrack is better (both are good honestly), but which soundtrack fits better. The Japanese soundtrack is a synth-fest much like the rest of the series.
Incidentally, this is the "official" explanation for the soundtrack change, Sega of America thought it wasn't good enough - I assume they wanted something that stood out much more from the synths the base console has. The other suspicion is that they may have had trouble with the licensing for the original tracks (hm?), though that wouldn't explain why Europe managed to get those as well (usually Japan licensing issues result in things staying Japan-only).

