What are some examples of translations of literature that are better than the original?

Germans have long thought that the Schlegel & Tieck translations of Shakespeare are better than the original. The conceit of Shakespeare being a translation from the original Klingon is an echo of that.

Not necessarily better, but certainly smoother is the best known translation of Cavafy, by Keeley & Sherrard. A lot of Cavafy is about his precarious linguistic eclecticism. It’s very hard to render in a non-diglossic language without sounding silly. Keeley & Sherrard, after others’ failed previous attempts, decided not to bother.

It’s not a faithful translation in that regard, no. But it is very readable.