The W126 was a pinnacle car with regards to vehicle design, it introduced fully integrated plastic bumpers front and rear, it was the first car in the world to have a resin bonded flush windscreen. Also the first with plastic wheel covers (on base versions) and it set aerodynamic standards at the time in the late 70's a CD factor of 0.36 was very rare amongst cars. Then safety features such as drivers and passenger airbags, acceleration skid control (ASR - traction control).
Its best features were its elegant, modern and now timeless exterior, outstanding interior build quality/materials, seat comfort and space and low noise levels (especially mechanical and wind noise suppression although its road noise was not too impressive), good steering and handling behavior, comfortable suspension.
It was the best car in the world until 1986 when BMW and Jaguar launched the E32 7-series and XJ40, which both showed were better to drive than the W126 with superior steering precision, grip, body control and high speed noise suppression (especially the 7series which had a lower drag of 0.32) and better ride comfort. But the W126 still had superior cabin space, seat comfort and build quality plus competitive engine refinement (V8 better than both sixes) and gearbox smoothness.
The Lexus LS400 came out in 1989/1990 exactly 10years after the W126, so Lexus engineers had more than enough time to study the W126 and assess all its weaknesses and engineer a winning formula into the LS400. When it was introduced its powertrain smoothness/low noise levels set new standards in production cars, it was a new benchmark for suppression of mechanical, wind and road noise (at 180km/h it was 5dB quieter than the W126 420SE) and its ride comfort set new standards. It set new standards in aerodynamics at the time a CD of 0.29 was the best in the luxury class. It could not match the W126 in interior build and material quality as well as space and seat comfort though. It also had a smaller boot.
If you have to work out the overall achievements the W126 was a benchmark car engineered and designed well ahead of its time.