Yeah she clearly has a favorite, but she points out flaws in both systems. I think that being critical of ones preferred system is noteworthy.
Edit: Furthermore, are the protagonists of The Dispossessed totally free in their society? No. Despite Le Guin’s apparently utopian aims in rendering functional anarchism, the protagonists chafe with society in many ways.
I actually think that this understates the degree to which LeGuin critiques the anarcho-communism of Anarres. We are presented with a society which is overtly anarchic and which finds its entire raison d'etre its its rejection of coercive power structures. But the entire thrust of the Anarres portions of the book is to demonstrate that the society is not, in fact, anarchic, that it is filthy with power and coercion, and that by pointing this out (and by being willing to work with the nations of Urras on scientific progress) the protagonists find themselves on the wrong side of that power structure.
On a recent re-read, I was particularly struck by the anecdote of a playwright who got sent to a de-facto prison for making a play critical of the local governing committee. "Gulags for political dissidents" is a pretty bad time in any case, but doing so in a society that specifically prides itself in having no prisons or police is uniquely bad.
Yeah, there is a very strong critique of the way in which neighbors on Anarres can effectively be tyrants.
Le Guin is masterful at letting no one and no thing off the hook. No character or society is ever perfect. She clearly has preferences and hopes. Any character or society which intentionally and actively constrains the liberty of another is subject to withering.
I'm currently in the midst of a read through of everything I can find of hers. Started with the Earthsea books (which I hadn't read before) and now in the midst of the Hainish cycle books (on The Telling at the moment). Many of those I had read before, but the differences in me between now and when I read them before are very apparent. I'm responding to the books in a much more emotional way, now.
Left Hand of Darkness and Dispossessed are deservedly the classics. If you've limited time, read those. "Five Ways to Forgiveness" is a very moving collection of five (funny that) novellas in the same story line.
The Telling is proving to be very interesting to me. It is very explicitly about the notions of humans creating culture by learning and telling mentioned in the original post. That is helping to illuminate many of the reasons why I've remained invested in computing and the web, despite many wrong turns.
I think you might be over-stating, not the strength of Le Guin's criticism, but the degree to which the community of Anarres fails to reject coercive power structures.
Part of what is so interesting about Anarres is that even when power is built up in institutions, it is not hierarchical power. Individuals build power primarily through their capacity for influencing others. Those who are older and more accomplished therefore have more of this kind of power, and younger people like Shevek have less. It's interesting, though, that the people of Anarres seem uniquely positioned to take note of and resist the growth of these power structures. Shevek, in whose point of view the book is largely written, constantly takes note of them, and the people of Anarres form groups dedicated to reform in response.
It's important to note that even the power built up in institutions lacks the capacity for organized violence. Even though the protagonist is "on the wrong side of" the institutional power in Anarres, nothing very bad happens to him as a result. When Shevek violates the central "law" of the land by trying to leave Anarres, no institutional power stops him, only a small spontaneous mob of protesters make the attempt. Le Guin says of them "they had no experience in being [a mob]. Members of a community, not elements of a collectivity, they were not moved by mass feeling; there were as many emotions there as there were people ... Their inexperience saved the passenger's life."
You mention the case of the playwright, Tirin. But his case is interesting because he clearly struggles to fit into an egalitarian society, and might actually be (or become) mentally ill. As Shevek's childhood friend, it was his idea to go about building a prison, and seems to take the most joy in putting someone in it. He's the most sharply critical of Anarres society, "a natural rebel", and this leads him into trouble we don't quite know the extent of. It's implied he's either gone mad, or murdered someone, or raped them. (He was merely reprimanded publicly for the play, not sent directly to the asylum.) How people like this are to be treated is clearly meant to be a confusing grey area, and Le Guin wants us to think about it from a critical perspective.
Tirin left therapy after several years (the island he goes to is explicitly intended to be therapeutic, not a prison), and Shevek ends up concluding that he actually did go crazy, as a result of being a kind of social outcast. Shevek says that "We have created crime, just as the propertarians did." But this kind of "crime" is clearly meant to be in contrast to what he later learns about criminality and class relations on Urras.
So it does seem as if Anarres has largely succeeded in curbing most institutional violence and hierarchical coercion. You're right, however, that Le Guin remains sharply critical of the unfreedom that remains. I believe this book and The Ones Who Walk Away from Omelas suggest that she sees political struggle as a never-ending series of revolutionary actions towards a utopian ideal. The ideal cannot be achieved, of course, but so long as there are people who can see the ways in which their society fails, there will be people who try to do better.
Interestingly, though, this seems to further confirm the point I made in my top level comment. Le Guin does not take the detached point of view of some supposedly "anthropological perspective", seeking to understand each society from within its own assumptions. Rather, she clearly thinks that at least some of the citizens of both societies are capable of grasping the same utopian ideal, and believes that Anarres is much closer to achieving it than Urras.
Edit: Furthermore, are the protagonists of The Dispossessed totally free in their society? No. Despite Le Guin’s apparently utopian aims in rendering functional anarchism, the protagonists chafe with society in many ways.