I like both. It is definitely harder to engage an audience with originals that they are not already familiar with and even more so as an amateur band in the local pub or small venue. Seeing the audience dancing/ singing along ect gives a certain energy that makes covers more satisfying to play.
However, I have never played for a big artist on large stages/ festivals and I imagine that is a fantastic experience and those I know who do that prefer it over the function gigs.