Either you have never stayed in the Kowloon Shang, or they have moved the hotel.

The Kowloon Shang is closer to the harbour than is the Peninsula, and, unlike the Peninsula, there are no buildings between the Shang and the water. The Shangri-la is actually closer to some of the better-lit signs and buildings -- for example, the Panasonic sign, which IMO is the best on the waterfront.

I don't claim that the Shangri-la is as good a hotel as the IC or Pen (some of the rooms at the Shang are dated), but its view of the harbour is second to none.