Better in terms of sound quality?
Given the same features (ARC vs. ARC, Audyssey vs. Audyssey, etc.) and same power output/requirement, separates and AVR are equal.
Better in terms of reliability?
Higher-end separates probably have the edge.
Better in terms of aesthetic and prestige?
Higher-end separates definitely have the edge.
Just because something is a "separate" doesn't mean anything in itself. Not all "separates" are even good.
If Bose made "separates", would that be good?
Would separates from OSD, Pyle, etc., be any good?