Tommy...well...like anything else, when we talk about design we are talking in generalities...There are some CC boats that are NOT particularly dry, there are some that look like midship condos an have a poor motion in a seaway.
I've never sailed on an S2 so can't directly comment.
In general though...I think CC's in smaller boats probably represent a compromise in some qualities for the benefit in space and privacy below.
As you get over 40 feet, the CC can be better integrated into the boat design (though it is not always done! ) and you get more benefits and less compromise.