I busked for a year when I was studying abroad and couldn’t work legally. I play the flute and would go out there and play little Bach pieces, that sort of thing. For some extra spending money, it was great; it certainly wouldn’t have been an ideal way to earn a living. (This was now years and years ago, but I’ve never told my mom and dad about it. They’d worry retroactively.) I had lots of interesting conversations with tourists and locals while I was busking, and received many compliments.
So anyway, yes, I do think busking is better than panhandling! Done well, it requires actual skill, unlike panhandling. If I have an appropriate amount of change (or a small bill) in my wallet, I almost always give to buskers, if they’re any good. Hearing beautiful violin music as I’m walking around town is a treat.
I do occasionally give to panhandlers, too, but much less frequently.