Functionally, when you use SMS or Authentication App on a mobile phone, you make the security rely on something you have. It has been used for centuries for house keys, so it is not fundamentally bad...
You can even make it look like a 2FA system if you phone requires a password each time you use it, and the SIM card also do. But... it is limited by construction to apps based on phones or tablets.
Password is something you know and is almost as old: safes using combinations also exist for centuries. You have shown the dark side: a good password should be easy to remember for the owner, and impossible to guess for anybody else... which is really hard to find. Worse, good practices recommend to change it on a regular base, which comes close to impossible.
But a password base system can simply be improved with a password vault and a correct random generator. Such vaults exists on almost any systems, and some like the excellent keypass have versions for different OS, that can be synchronised either locally or through internet storage like DropBox. Then the password is true random and can be changed at will, and the security relies on the vault (that can have backup copies) and the master password that is never exchanged outside the device (or PC).
So you system can be better than a trivial password, but it depends on specific hardware, while a password system can be as secure and is fully portable and can provide protection against device loss.
I do not want to say that SMS or Authentification App are bad. I am even pretty sure that they fit perfectly some use cases, but IMHO the good old password system is still appropriate for many others.