Ignoring future nerfs for pallies, which may take a while if we ever get them, it's just better to play a H-Priest. Chastise and Fear are worth more on D than the 1-per-minute hammer, and while your survivability and throughput are definitely not as good, the versatility should compensate for it well. Rather than saying 'better or worse' in such black in white terms when comparing the two, I feel that this is more a case of 'right and wrong,' this determined by your playstyle and the team/circumstances.
H Priests are excellent defense healers, no matter how their raw ability stacks against an H-Pally. On top of that, H-Pallies are this monstrous FotM class; in premades, you'll stand out and be more useful than yet another pally. Until (or, more likely, unless) Bliz does something to bring H-Pallies more in line with the other choices in terms of mitigation and throughput, it's unlikely that any other healer will ever be better than them pound for pound (though some are already situationally better, to be sure). In the meantime, play what you enjoy; almost everything can work and work well if done right.