Steel Serpent looked better than Danny did, too. Both Danny and Shang tend to hold back their killing techniques for when there's no other option..
But Danny went from losing his Iron Fist to Steel Serpent a second time, fighting off packs of wolves and nearly freezing to death, to taking on Serpent in a rematch with his clothes in tatters and tired, but managing to soundly beat him and regain his power.
And Danny always said Shang Chi was the best he's ever fought.
Lets go with the version Danny beat. Iron Fist, plus those weird gauntlets that spout flames.
And just a fun fyi, did you know there's a Steel Serpent that predates Davos? He had a delayed death punch, where he hits someone and they die several minutes later, so they can never prove he murdered them. Danny ends up using his IF at the same time SS tries his death punch, and it reverse the ki back into him, for his own delayed death that they never show..
And no, it's not a spoof on Fist of the North Star, because this was written in the 1970's! I think 1976.. Likely an inspiration for that series though.
The thing is, we're going off of Shangs rep and Danny's words more than anything.. But on feats, as you pointed out Davos was usually even with Danny. And in that one fight Shang and Danny had, they seemed about equally even without the use of the Iron Fist, and Shang hoping Danny didn't start using it (As was Danny, who was forced to go all out against Shang by a man that threatened to kill a hostage when they tried staging a mock fight..)
With that in mind, one could argue just because Danny upped his game to a point where he could crush Davos later, doesn't prove Shang Chi has reached that same level..
And it's not like Danny simply decided to stop holding back.. He had to go on one of those Eastern style journey's of self discovery to get to that point...