Another reason why FM may seem better than satellite is that FM radio signals are highly compressed -- not compression in the digital sense, but in dynamic range. This increases the apparent volume and "punch". It is a common practice (sadly) in music today to severely compress the dynamic range of mixes because to the average listener, louder = better.
As with anything, it is highly subjective. I personally find the clean satellite signal sounds "better" than the often noisy, overly squashed FM radio signal, despite the artifacts of digital compression.
Nevertheless, sound quality has never and should never be a selling point of satellite radio.