Sorry, I'm an animation student, so this is gonna get kinda long....
If you asked me this just two or three years ago, I would have probably said Japanese.
However, since then Japanese animes have been continuously undercutting my expectations and disappointing me, while Western animation has thrived and continues to outdo my expectations.
That's not to say I don't like Japanese anime anymore. Give me a Gainax, Ghibli, or Production I.G. anime and I'll be just as happy as I would wit any other show/movie.
It just seems to me that, at this point in time, anime has hit a sort of roadblock. They seem to have run out of steam and are just going by what's worked in the past. A lot of the content seems to be stagnating, and it seems like its getting harder and harder to find quality gems amongst the same tired tropes and plot rehashes.
On the other hand, Western animation seems to be getting a well-needed breath of new life. After the dismal past few years (pretty much most of the mid-2000's), I've seen a real big influx in great new programs over the past 2-3 years. The industry is getting fresh blood, new ideas.
Another point I'd like to bring up is the difference between the content and approaches to animation:
Anime use a lot more cheap animation tricks than the west, whether its using animation loops for extended periods of time, slow pans over unmoving artwork, excessive flashbacks, lazy lip-synching (I'm aware that it makes it easier to dub over, but that doesn't make it less lazy), and a general lower Frames-Per-Second rate than Western animation.
-There's also a trick I'd like to point out for all you action anime fans: Most anime action sequences revolve around long standoffs and quick bursts of action for a reason- the faster the movement, the less frames you have to use and the easier it is to animate.
Contrast that with Avatar: TLA, a western animated action series stylized like Japanese anime, where they, instead, used constant action sequences with breaks in slo-mo, which actually take more frames than regular animation and are, thus, harder to animate.-
I'm not saying Western animation isn't prone to taking the cheap way out, oh no. I'm just calling attention to the fact that the use of these tricks are far more prevalent in Japanese anime.
There's also the issue of what is being animated. Next time you're watching anything animated, Eastern or Western it doesn't matter, I want you to ask yourself "why is this a cartoon?"
I think you'll find, far more often than not, most anime could just as easily work as a live action show (and probably run just about the same budgets). The fact is, a lot of Japanese anime don't really take full advantage of the fact that they are, in fact, animated. They focus too much on realism which, while it isn't a bad thing (sure, its great for "look at how well I've learned human anatomy!", if you do it well enough), but it isn't really what animation is there for. And with special effects at the point they've reached these days, even action shows like Naruto and Bleach would work in live action.
In fact, the only Japanese animes I'd say outright actually take full advantage of the medium, offhand, would be FLCL, Panty & Stocking, One Piece, and Tatami Galaxy (look it up).
On the other hand, the list of Western cartoons that could also work as live action shows is far shorter (I dare you to try to wrap your head around a live action Adventure Time!), and even those series, like Futurama, South Park, and Family Guy, always make a point to incorporate jokes and elements that could only work in a cartoon.
There's also the point you mentioned about Western animation being far more varied, stylistically, than Japanese anime. I think its that similar style that is part of what gives most anime their sameness, while western cartoons are constantly changing their looks, so even rehashed stories feel fresh and new.
