Both acts were guilty of attempting to emulate previous songs, but the 'Sunshine' album was bizarrely like a whistle-stop tour of every single they'd released to that point (I quite enjoyed it, but it was odd)
I think they did progress albums-wise, but Steps seemed to evolve in a much more organic manner - each album felt like a natural progression from the last one - yes they dabbled in different things, but essentially from start to finish, Steps were a pop act. S Club 7 got caught between the teen-pop of their debut and the credibility of 'Don't Stop Movin', each album after their debut felt like it was trying to do too much to not be Steps, but without any REAL idea about what they should sound like - inconsistent, but they were buoyed by a fairly consistent stream of singles which DO, at least, make chronological sense when played in sequential order.
But as I've said elsewhere with all these reunions, and as Silly Moo says above, the real appetite for comebacks so far has been those that ended before the public had their chance to say "we're not interested anymore" - either on a sour note or prematurely. Steps arguably ended just as people started to realise how good they were, there was definitely still a fanbase for them. I don't really see what the demand for an S Club 7 comeback would be commercially because their albums had started to dip in sales, their chart peaks were steadily reducing and the whole thing was looking very TIRED. I don't think people were surprised or disappointed when they split up, it just felt like the end of their shelf-life.