Could you elaborate on how the paladin overshadows the priest in almost every way?
Well, I like the priest, but here is why:
TrainingPriest: Holy, dark x3
Paladin: Holy creatures and level 3 Holy and level 2 war, dark x3
The difference between Holy and level 3 holy is almost nothing. The current spellpool only has [mwcard=MW1I22]Resurrection[/mwcard], which is to be honest, a horrible card. The priest however has war level 2 training, which is AWESOME. He has cheap access to TONS of good war spells.
Mage only cardsPriest: Staff of Asyra, Crown of protection, Ring of Asyra.
Paladin: Crusade banner, Dawn's bastion, Sword of Radiance, Paladin's cloak, smite, ...
I think the difference is pretty clear here.. Sword of Radiance > Staff of Asyra. Ring of Asyra is pretty basic and the crown is pretty bad. The paladin's set has many more good options.
Abilities While I for sure don't dislike the Priest's abilities, they are very expensive. Especially for a 9 channeling mage. A second disadvantage is that they are very predictable.
In contrast, the Paladin has many possibilities with his aura's, especially in combination with his "paladin only" spells. So, not very predictible. I'm not sure how strong his abilities are yet because I haven't used him, but I'm pretty sure they are strong.
All in all, I think the paladin is simply the better priest now. Giving the priest channeling +1 would help and it would help him pay for his abilities.