Agreed, the Empire Pellaeon created was the best in my opinion. It combined the Order of the Old Empire without the evil aspects. It had a functional and decisive government(Granted the Moffs had their moments of stupidity) If Pellaeon had not been forced to launch that last campaign in 19 ABY his Empire may very well have seen large sections of the Northern Quadrant willingly join a prosperous and Just Empire(As many did after the Vong War)
I feel I must prefer the Empire of the Hand, despite the limited amount of exposure it gets, though Pellaeon's empire is a very close second (with the PA a VERY close 3rd). As you alluded to, the main issue was mostly the Moff Council, which Pellaeon's empire mostly retained simply due to inheritance, not because Pellaeon would've wanted it the way it was - the flaw in the system was one that remained from the original Empire. The Empire of the Hand, however, I feel was truly the Star Wars empire that should have been - one that was sincerely based on willing cooperation and acceptance of central authority, and with a central authority that knew its limits and its strengths, and when to employ the latter or recognize the former, as well as having a general long-term goal that it was working towards.
Of course, Thrawn has always been my favorite Imp, so I'm a bit biased here - the empire he personally set up being my favorite is no surprise to me. Kaine I still have to give a great deal of respect to - he was willing to accept some level of diplomatic relations with the NR in the short term in favor of playing the long game, and from what little I know he didn't push the kind of totalitarian or human-centric policies that helped bring down Palpatine's Empire (as well as, you know, lowering it on the less practical, more ethical scale). The biggest mistake he made was accepting the reborn Palpatine, though one could argue that his followers (mostly loyal Imperials who felt he was continuing the line best) would have overthrown him had he done otherwise - instead, like nearly everyone who ends up in thrall to a dark-side Force user, he ends up dead due to that Force-user's arrogant overestimation of their abilities. And to Kaine's credit, the PA did NOT dissolve into chaos after his death the way Palpatine's empire did - instead it remained mostly intact, if somewhat paralyzed in terms of affecting galactic events, until being re-annexed by the Imperial Remnant under Pellaeon.