False dichotomy.
In any case, I'd rather go with the better *coach*: the person who better understands people and their motivations. I've worked for a guy whose team won the NCAA cross-country meet, and he was no distance runner (to put it mildly). Frank Gagliano and the late Norm Levine (another NCAA winner) have also had a fair amount of success in coaching distance runners, and nobody would guess they had a personal background in the sport.
By the same token, I've known former runners who were great coaches, and others who really sucked. It's much more a question of what kind of *people* they are, rather than what kind of athlete (if any).