Oddly enough, I haven't put much thought into what my favorite LEGO sets are.
I do have an emotional attachment towards 7251 Darth Vader Transformation since it was my first LEGO set all the way back in '05. However, after rebuilding it a few years ago, I can say that it's less than perfect. The gimmick of the set is okay and all, but all the random bits added in just makes me feel like it's a jumbled mess.
I would also apply this to 375 Castle (a.k.a the Yellow Castle) since I have more of a sentimental attachment to it instead of enjoying it purely as a great set.
As for sets that I would consider to be darn-near perfect? 70816 Benny's Spaceship comes to mind instantly. Styled to look like a classic spaceship from the late 70's whilst still using LEGO's current array of pieces, it's honestly a stunning set. 31050 Corner Deli and 75052 Mos Eisley Cantina also come to mind as fantastic models.
I'll probably come back to this later with more though, but yeah.