I prefer leather, I've had a few knives get their edges blunted and their blades lightly scratched by Kydex. Leather hasnt given me any issues yet, plus it seems easier on the blade.
Of course I like working leather, but I think the answer to your question really is that it depends on the use of the knife/sheath combo. In some cases I still prefer kydex, but most of the time it's leather for me.
For sitting around and admiring, I like leather. For actual use, I prefer Kydex. I trust the retention of Kydex more, and they are lighter. Leather sheaths tend to be bulkier, but they are a heckuva lot prettier.
If I want some type of show sheath for a collectors knife, than that it would be, but I prefer kydex now, as soon as I have enough money all my knives will have kydex pants.
i know one thing. you can't ambush a bear and take him down hand to hand with your favorite combat grade knife; hang his head in your living room; and make a sweet KYDEX sheath out of his skin....but that's just me talkin here
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