9600s are fine. Unless you are using lots of PCI cards, any of the other machines from that era is also more or less fine.
In my experience, PowerMac G4 "Yikes" (PCI Graphics) and PowerMac G3 Blue-and-white Rev2 are stable with 9.2.2 once you find some RAM that works well with them and if you're not using too many or too wild cards. Any blue-and-white with just one SATA card should be fine, for example, and let you avoid the controller issue.
To add about the disk controller issue, LEM and Wikipedia both report that it happens both with two hard disks and with hard disks meaningfully newer and faster than what the original blue-and-white G3 shipped with. If you have such a disk and it works fine, it's good to go, but if you need to upgrade it, consider just doing so via an expansion card.
We have a Yikes! G4 that is running OS 8.6 and the user doesn't seem to have any problems with it.
Notably, the YIkes! G4 is mostly the same computer as the powermac G3, just, with a G4 processor installed instead of a G3. I have a blue G3 case with a 450MHz G3 processor and a Yikes motherboard and it performs great for me, but I'm not putting lots of different cards in it.
Mine has had its fair share of foibles, but to be honest, I don't think I've owned a single Mac
without some kind of weird foible or behavior so it doesn't strike me as weird beyond what Apple has ever done.
We ran 6000 and 7000 series PowerMacs for a while, but ditched them for the G3s. They were just so much faster.
Most 9600s will be approximately as fast as most of the 7000 series machines.
To be honest, 9600s are highly sought after by people who are in essence looking to build a bad replica of a later Power Mac G4 system, but with a beige case, so I wouldn't waste time and money buying one if something else will do what you need fine.
There are G3 upgrades available for the 7/8/9 series, and the 8600 is available in a version with the same go-fast 604ev/mach5 stripes the 9600 had. (Though, if you intend to G3-upgrade, I recommend against bothering to find a Mach5 /250, /300, or /350 version of the 8600 or 9600, both because from a collection and interstingness standpoint I think those should be run as-original, and because the extra CPU speed up front doesn't help a lot with the upgrades.)
You are absolutely right though, a G3 totally smokes even an 8600/300, in terms of compute performance. How much that matters will depend a lot on the particular applications and workflow a machine is using.