Tau are sorta like the big E durring the great crusade in a way
But Emperor like real fire. Emperor like raging fire. Tau like...
smoldering fire.
And all things considered, I wouldn't call Great Crusade humanity caste-based, maybe apart Marines (though really Marines aren't born that way), Custodes and assorted specialized troops, since it was very much meritocracy for Emperor, as long as you're human that is. An argument could be had for a caste system during later times in Imperium, but that's really as much of a caste system as just social classes, and even if you're otherwise seemingly incapable of escaping lower classes, ever-present military is the great equalizer if you miraculously manage to not die. There's also no real mind control, though Emperor did act like a huge dick at times messing with people to make them do the things he wanted them to do.
It's a neat comparison on the surface, but falls apart pretty quickly if you think about it, especially and mainly because Emperor took most of the Galaxy in like, two hundred years (granted, it was reconquest more than colonization, but that's another difference there) and Tau are millenia into the expansions, and it's arguable if they will continue them for much longer, what's with Tyranids, "Great Rift", Sautekh Dynasty, Startide Nexus being essentially what Emperor's Webway gate broken by Magnus was, and all that shit happening. It'd be more accurate to compare Tau to the Dark Age of Technology human expansions, though again it's much smaller in it's extent and impact, since Tau lack many things that made human colonization possible (like Gellar Fields, since apparently they can travel through warp with really bad results nowadays), and they are working to establish themselves in a much more hostile Galaxy, so naturally, they are and will be shat on very heavily.
As far as the "is the Tau space the least-shitty place to live" you have to answer yourself a question, is being a mind-controlled slave with truly no free thought who believes he lives in a paradise better than being a free-willed (though you will be shot and lobotomized for thinking wrong thoughts if you are unlucky enough to have a psyker listening by, but due to sheer logistic of the task nobody really bothers, which is why various cults can even take root in Imperial societies) slave (with I guess little free thought too, considering the indoctrination, but oh well) who sees with his own eyes he lives in a complete shithole. There are some further points like the capability of rising through the ranks, and subjectivity of life being shit in Imperium (since, just like real life, it's a giant dice roll, where you can end up as a menial on lower ass end of a Hive world, an wealthy aristocrat or might as well end up as a regular dude with home, car and desk job), but Tauboos heard those already and still prefer to believe in a lie of amazing society that doesn't actually exist.