Sort of agree with you about Hughes but not fully.
Agree that, if he'd replaced Keegan, or even replaced Sven without the Sheikh's millions coming in, he'd have kept us solidly mid-table and kept us competitive in lower level European competitions for a bit. We were back in the UEFA Cup before the Sheikh came along anyway, and we got through the groups pretty comfortably without much involvement from Robinho (played and scored against Twente but didn't play against Schalke or PSG) so we might have had a couple of memorable cup runs and his reputation would be similar to Keegan's, most likely.
But I'll be honest, even before we were in the bottom three at Christmas and even before the infamous seven consecutive draws, I used to say to my mum at basically every home game that Hughes never felt like a City manager. Never really connected with the fans, never really felt like part of the club, never really felt at home in the dugout. He never felt like he was our manager because he wanted to be - more because he saw us as a stepping stone to somewhere bigger. Then when we became that "somewhere bigger" he didn't really know what to do.
Despite all that, though, I think he's held in such low esteem by City fans these days not just because spent millions and didn't really make us any better (we finished 9th on 55 points when he came in, when the decision was made to sack him we were 8th on track for 61 points), but because he conspired with his media pals to paint himself sympathetically in the aftermath. City's name was run through the mud - his sacking was the point where the media really turned against us. We showed we were serious and we'd sacrificed one of Fergie's golden boys to do it.
Our fortunes under Eriksson might well have been the same overall but he has the benefit of coming in after Pearce's reign, which, as you noted, is the worst period in the club's post-Maine Road history. Sven stitched a side together on the cheap in about four weeks and somehow had us fighting for Champions League places until the end of January when we'd been among the favourites to go down. Add in the derby double and the fact he was ousted by a mentalist on the run from the law and you can understand why us lot like him more than Hughes, haha.
One thing I'll always remember the Sven season for, though, is that for the first time in my time following City (since 1999) we never dropped into the bottom half of the Premier League during the season. We were still 3rd in November and still 6th in February. Even as results tailed off in the second half of the season - mainly because Elano fancied the winter off - it was a joy to go to City games and have something good to fight for until April/May. I often say that season is the start of the resurrection, when it was obvious the club had potential with the new stadium, more foreign players, good facilities, etc., it just needed the right backer.
Still remember going to home games in the autumn of 2007, coming away with another win, and the fans singing "City are back, City are back, Hello Hello!" all round the ground. It got to the point where a bloke about five rows in front of me had (top) CITY ARE BACK (middle) 07 (bottom) HELLO HELLO printed on the back of his home shirt. I wore that home and away shirt for years afterwards, even during the Mancini days. I dined out on that Elano free-kick against Newcastle until we lifted the FA Cup, lol.