I actually never bought that one, but I like the concept of a Live Arcade version better for one simple reason: I am lazy.
The Live Arcade games sit on the hard drive and are always ready - I don't even need to find the game and load it into the drive. They cost, at the high mark, half as much as bargain titles, but I know half the money goes straight to the developer (which is, sadly, better than retail). And I never actually have to track down a copy of the game and buy it, online or otherwise, even at 1am on a Sunday. I am pleased by this completely effortless way to acquire and play games. I'd also say cost-effective, but it'll take a lot of downloaded games to make up for the 360.
More specifically, I actually only want this specific version of the game - I thought the Collection was too 'loose' in its gameplay modes, with the ability to mix and match fighters from different game versions. I would think that this limitation of options would also make it much more likely to get games going as well. Street Fighter II: Hyper Fighting was the pinnacle, IMO