Size (no need for a big water tank, burner, and engine), efficiency (much of the heat energy and steam was lost, not to mention the costs of supplying water), safety (boilers were known to blow on occasion, I assume early internal combustion engines did as well, but not as dramatically) come to mind.
Early on, I would suspect that steam engines probably would provide greater raw power output.
Early on, I would suspect that steam engines probably would provide greater raw power output.