The Portable Hole creates an extradimensional space that is 6 feet wide in diameter and 10 feet deep. It can be folded to the size of a handkerchief, weighs effectively nothing no matter what is carried in it, and has no weight limit as to what can be put inside of it. It requires one action to spread it on the floor and access it. The description says nothing about being able to damage or cut the hole with typical weapons. Beings in the hole can breathe for 10 minutes before beginning to suffocate, with no mention going towards how many creatures are in the hole.
The Bag of Holding contains an extradimensional space that is 2 feet wide in diameter and is 4 feet deep. It is about the size of a regular carrying bag, weighs 15 pounds regardless of what's put in it, and has a 500 pound weight limit as to its contents. It requires one action to reach into the bag and pull something out. The description also mentions that if the bag is pierced, such as with a sword, the bag will rupture, and all its contents will be ejected into the astral plane, with the bag itself being rendered unusable. Breathing creatures inside the bag can survive up to a number of minutes equal to 10 divided by the number of creatures (minimum 1 minute), after which time they begin to suffocate.
With all of these factors taken in, it seems like the portable hole is in every way better than the bag of holding – bigger, more easily carried, even allows breathing for longer apparently. Yet all I hear from adventurers these days (at least those in my group) is "can we have a bag of holding? Can we have a bag of holding? Can we have a bag of holding?" I'm sorry, but I'm stumped –
How is the bag of holding in any way better than a portable hole, other than its iconic nature in the history of D&D?
Advantages of the Bag of Holding:
Removing items costs an Action, whereas with the hole you have to actually climb in to get something. Drawing an item from the bag in combat is reasonable (if expensive); from the hole, not so much
The bag is less suspicious. Unless you draw something that obviously would not fit, a Bag of Holding just looks like a bag. A portable hole is going to look highly magical when in use.
Needs less space. The bag is just the size of a bag; the Portable Hole requires a 6ft diameter space to open up against. Not very practical in the crowded space of a dungeon.
Not as hard to get. The Bag of Holding is an Uncommon item, the Portable Hole is a Rare.