I think they exist in parallel because they were initially developed separately: Collocation was developed for optical data (source) while the stack tools were made for geocoded radar images.
The settings are slightly different:
Collocation features 5 different forms of pixel resampling and was originally designed to merge exactly two products. It was updated recently to feature multiple slave images. It also allows to define the output names in case you need to specify it.
Create Stack features 6 different forms of resampling and allows to use the orbit information of radar images as initial offset (instead of the geocoding of the image). This usually cannot be done with optical images.
Basically, if the geocoding of the S1 image is bad (e.g. because of inaccurate terrain correction) both methods will give you a bad result, because neither of them estimates the offset of the images to adjust the slaves against the master. This can only be achieved by coregistration.
Did you compute a stack with both methods? Maybe you can shortly report if you experience differences in the results.