Absolutely correct, I've even given talks on this. Check out slide 52, I think we're in strong agreement here:
https://speakerdeck.com/philnash/2fa-wtf-at-pycon-singapore?....
I'm not advocating for poorly implemented 2FA, just that SMS 2FA is more secure than just a password.
If a site required you to have a 32 character length password, but kept the passwords in plain text, that wouldn't make your password any less strong. It just opens a different attack vector. If a site implements 2FA via SMS, but allows password reset via SMS it doesn't make SMS 2FA less secure, it makes that sites implementation incorrect.