The "better" destination between Bhutan and Bali is entirely subjective and depends on your individual travel preferences. Here's a breakdown to help you decide:Bhutan:
Focus:

Cultural immersion, pristine natural landscapes, spiritual experiences, and a focus on sustainable tourism.1
Emphasis on "high-value, low-impact" tourism.2

Experience:

Tranquil and exclusive atmosphere.
Unique cultural heritage and Buddhist traditions.3
Stunning Himalayan scenery.4
More structured travel with guided tours.

Considerations:

Higher cost due to the Sustainable Development Fee.
More restrictive travel regulations.

Bali:
Focus:

Diverse experiences, including beaches, surfing, cultural attractions, vibrant nightlife, and a wide range of activities.5
Variety of accommodations and dining options.6

Experience:

Lively and diverse atmosphere.
Beautiful beaches, rice terraces, and temples.
More freedom and flexibility in travel.
Tourism infrastructure is very developed.

Considerations:

Overtourism can be a significant issue.
Environmental concerns.

In essence:
If you prioritize cultural immersion, tranquility, and pristine nature, and are willing to pay a premium, Bhutan is an excellent choice.
If you prefer a more diverse and flexible vacation with a wide range of activities and budget options, Bali is a great option.7
Therefore, there's no objectively "better" destination. It's about aligning your travel goals with what each location offers.