While Small World Holiday is amazing, and it's nice not to pay for a party, I still do not think Disneyland does Christmas better then WDW. For one thing, MKs parade is longer and has those scents.
I love Disneyland's firework shows, Forever is the best castle show I have seen, with Remember a close second. I also think Hallo Screams with its projector image upgrade is superior to Hallowishes. However Believe, while lovely is a huge letdown from those shows it is slow and restrained, not something I look for in a firework show. Holiday Wishes, however, blew me away and is my third favorite castle show.
Just talking about the castle parks is missing half of the experience. DCAs Viva Navidad is fantastic, I saw WOC Winter Dreams which I enjoyed but know it has been retired. However after going to Silver Dollar City and Dollywood for years, Disneylands Christmas left me cold because it did not ever highlight the religious aspect. I'm not a person who wears religion on my sleeve and I don't expect religious iconography everywhere but Christmas is a religious holiday and to properly celebrate it you need to address it, which is where I turn to Epcot.
Epcot is my favorite park at the holidays, the Candlelight Processional is amazing and perfect in every way and gives WDW the religious celebration DL lacks. As an aside, yes I know that DL originated the CP and does it one weekend every year, but unless you are a local or a super fan who is willing to spend all day in town square you are never going to experience the CP at Disneyland.
That brings me to my final argument in favor of WDW: Illuminations' Let There Be Peace on Earth tag. The holiday version of Illuminations is jaw dropping and makes you feel like the air is exploding. It's my favorite firework show I have ever seen and that includes Boston's 4th of July show. There is nothing comparable at Disneyland or anywhere else really.
My favorite time to be at WDW is Christmas, my favorite time to be at Disneyland is Halloween.