Is a system with more capacity better?

No. When an air conditioner is first turned on it is at its least efficient point. A system with too much capacity will run in numerous short cycles, turning on and off repeatedly, therefore causing it to be less efficient therefore, larger heating system with more capacity will deliver less comfort but still costs more to operate. Also, an air conditioner only removes humidity when it’s running, so a system with shorter run cycles doesn’t remove humidity from the air very well.