Yeah, but just how inferior? In most cases it is really exagerated. The SF games are fine on PSX. DOA2 HC's graphical differences are minor and it has extras.
The versus series on PSX is an exception, but the others are perfectly fine. Though I like MSH vs. SF on PSX.
Look at Capcom vs SNK 2 on one of the next gen consoles, then the dreamcast. If you cant see a difference then all hope is lost on you.
Saying that the DC has a much exaggerated fighting library is just plain out wrong. Countless fighting games have already been mentioned which are either exclusive ports or just simply superior to rival ports.