Better? That like most car "spirited discussions" are extremely subjective. I've driven the 2010 and 2012 Camaro SS, the 2012 Mustang V6 and GT and the 2011 Challenger. I had my pick of the lot and I went with the Mustang Convertible V6 Mustang. It's basically 2010 GT power in a 30+mpg package which fits my needs great.
To my eye the Challenger is the best looking of the lot hands down. It's also a freaking boat. It's a muscle car in driving and handling and just not what I was looking for. It was a lot of fun in a straight line, has a sexy body and plenty of power in it's big ol V8
The Camaro was fun to drive in certain situations, the HUD is neat, the handling is quite good and the power is definitely there. I didn't find that I truly enjoyed driving it however. You (I) can't see well out of it and it wasn't a pleasant car on the freeway in that regard. I think wringing it around a road course would be a great time and it certainly had some straight line pep though not as much as the Corvettes I'm a bigger fan of. That's not apples to apples however so I'll leave that there.
The Mustang was everything I wanted it to be. It's a fun car to drive, handles very well, sips fuel and I am very comfortable in it on the freeway as well as winding curvy roads. The newest styling and the lines of the car are definitely paying homage to the classic lines of the 60s cars, moreso than the Camaro IMO and you can see out of the darn things. The dealers can't keep them in stock and I ordered a new 2012 V6 (complete with 6-8 week waiting period) instead of a 2008-2010 GT because it's a better car for the money with the added bonus of being fuel efficient. This helps on my 500mi round trips I'm currently doing in a 2005 Silverado. I actually might agree with you that "sales are down" but only because Ford can't produce enough of the darn things to sell to everyone who wants one. I could buy "a" Mustang. I had to order to get "my" car as have many other buyers.