May '77 was great, but I really think the question comes down to what era od Dead one like the most. Lots of folks like the early '70s stuff best, '74 had some really hot stuff, although most of my hardcore friends really like '71 and '72.
I personally like early '90s Dead the best '89-'91.
But it's all good.
One other thing that I've hypothesized, but rarely gets discussed:
Jerry Garcia likely played music before more live listeners than any musician in history. When you look at the size and frequency of Dead concerts, coupled with JGB, I'm hard pressed to imagine any musician who could have played live for more people.
Oh, on your hypothesis. You might be right, but I'd guess Dylan.