Hurricane was top notch when it first flew in 35 and the Spitfire prototype was a bit slower than original thought. Also the early marks of Bf 109 were underpowered and underarmed so the Hurricane was certainly no slouch.
Comapred to? Difficult to compare without a direct comparison or confrontation.
The Spitfire prototype managed 349mph. That is certainly less than the 350mph Mitchell estimated.
2, 000 bhp fighters were over the horizon so why waste resources on another 1, 000 bhp fighter?
2000hp fighters were a long way off in 1936. Neither the Vulture or Sabre had run by that stage, so staking the future on thise would have been risky.
The Spitfire was a more risky design than the Hurricane. It was from a company unused to series production, it used new construction techniques but it also promised far higher performance. The Hurricane was a safe choice, and would serve as a backup if teh Spitfire failed.
Also plenty of schools of though on the advantage of turret fighters and twins like the Whirlwind which promised maximum firepower and plenty of performance.
The turret fighter concept came into vogue after the Spitfire and Hurricane were already being built as prototypes. In the end the Boulton Paul Defiant was put into production as well as the Spitfire and Hurricane. Prototype testing revealed how the turret affected performance.
Cannon versions of the Spitfire and Hurricane were proposed to the specification for the Whirlwind. No doubt that the Whirlwind offered high performance and heavy firepower, but would it be as manouevrable as a Spitfire or Hurricane? Westland dragged their feet enough that the MAP looked for alternatives as stop gaps, settling on the Beaufighter.
Also Spitfire was slow to get into production and difficult to build so why bother?
Because it was clearly the superior aircraft.
Also Spitfire wasnt rugged, short range and couldnt carry a heavy ground attack load. All minus points.
Ground attack was not considered for either the Spitfire and Hurricane in the 1930s. The short range was not a minus point because it, like the Hurricane, was to be a defensive fighter.
So one could argue putting Spitfire in production was not the most obvious thing to do. Based on 1930s thinking.
The 1930s thinking behind the Spitfire and Hurricane was for an interceptor to shoot down unescorted enemy bombers. The use of radar negated the need for standing patrols and thus long range, and put an emphasis on climb performance.
The climb performance of the Spitfire was outstanding, quite a bit better than the Hurricane's. And most of its other performance paramaters were very much better than the Hurricane.
The Spitfire fit the 1930s concept of a defensive fighter perfectly.