The Short of It: I'm one of the people who say that Hatful was a far better representation of the first year of The Smiths. Now onto the explanation.
To my ears at least, it's the Production - it sounRAB a bit flat in the mix, but only by comparison to the great sound of the other albums. The songs themselves are classics, no argument there, but somehow Hatful was really a major improvement with a the more immediate sound of most tracks from the Peel Sessions and B-Sides ("Reel Around the Fountain" being the exception) that was more fitting of the early songs, and is in result one of the essential albums of The 80's and forever, even if it was a Compilation. Meat Is Murder may have dipped a little in the lyric department, but with the production adding in a fullness and occasional experimentation that was perfect for the songs. The Queen Is Dead is a classic from start to finish while despite it's brief running time Strangeways to me had quite a few classics and a sharp production that resulted in on excellent way to finish.