He has been played by two magnificent actors, both incredibly talented who have been fantastic in multiple roles. The first to play this role on film has been nominated for Academy Awards; the second a young actor, also nominated for Academy Awards. He is among the most recognizable villains in film today.
… Oh, sorry, did you think I meant the Joker? I was talking about Magneto.
I could have sworn Chris Sims of Comics Alliance did an “Ask Chris” about Magneto that made all of the points that I’m about to make. If I find it, or you find it, dear reader, I will link it. In any case, while I love the Joker and Batman as characters, and they’ve made for two mighty entertaining films, Magneto, as a villain, is heads and shoulders over the Joker.
I don’t remember who said it originally — Michael “P.S.” Hayes of the Fabulous Freebirds, or perhaps Jerry “the King” Lawler — but one of the all time wrestling greats said that the best heels are the ones who are convinced they’re right. A villain who recognizes himself as a villain is not as compelling one as one who thinks he is genuinely doing the right thing. The Joker is the former. He embraces chaos and destruction for his own sake. His mission in life is to remake Batman in his own image. Everything else is secondary. Especially Harley Quinn. He has no principle, he has no guiding purpose; he merely exists. Batman is always facing “timeless” enemies — Ra’s Al-Ghul is only the most obvious example — and the fact that the Joker is always there, even when he isn’t (maybe especially when he isn’t), gives him a larger than life character. That’s his strength — and also his weakness.
Magneto, or Erik Lensherr (at least in the movies), is very much grounded in reality (pardon the pun.) The guy was a Holocaust survivor. One of the things Marvel does better/differently than DC is making characters “real” people who happen to be superheroes, and Magneto is no different. He has seen the absolute worst that humanity can achieve and vows it will never happen again. He believes his opinions are the correct ones, and to hell with anybody who disagrees with him. He can and will work with others to achieve his goals (unlike the Joker, who is always manipulating them, usually for the sake of doing so), because his goals are all that matter to him. He is a charismatic leader of men, and if his goals weren’t ultimately so horrific, he wouldn’t be a villain at all.
The Joker’s origin story, perhaps alone of all major villains, has pretty much been “BECAUSE REASONS.” Look at The Dark Knight, where Heath Ledger’s Joker tells a dozen different versions of his origin, almost all of which are certainly lies (if not all of them.) He is, after a fashion, mocking the viewer, who has been trained to expect “official” origin stories for their villains. There isn’t one for Joker. The origin story isn’t just part of Magneto — it is Magneto.
36 Chambers - The Legendary Journeys: Execution to the max! 
I’d classify Magneto as an anti-villain. He is the Punisher of villains. He is not a bad person, but abides by no rule other than his own and will ruthlessly destroy anything in his way. How this differs from a regular villain is that his goals are not power, conquest, and destruction; his goal is to preserve “his” people from those who see them as a threat to be eliminated.
In other words, I agree with your sentiments, but would consider the Joker the better villain qua villain.
Except Joker isn’t after power or conquest either; just destruction. Magneto is after power and/or conquest, in the sense that he intends to use those to preserve “his” people.