I think they both could use a stronger top.
Also, how are they on the move? Do they walk smooth and soundly? Do their back feet step in the tracks made by their front feet? It may just be the picture but they both look posty to me. I wonder if they have any structural problems which can't be seen in a photo.
They both look a little overconditioned. Was the judge at this show consistent? My feelings are that I can respect a Judge's opinion if he is consistent in what he selects for. If I remember correctly there may have been past incidences that you have not thought too kindly of a Judge at a particular show. I don't reccomend Judge bashing at all.
As for the tighter sheath comment... is there any evidence that a tighter sheathed bull "gets the job done better"? I have ALWAYS wondered that! If there is, I completely agree with Moocow11's reply. If this steer were to show fairly well and his dam happened to have a heifer the following year the heifer has a likely chance to be selected as a replacement. Then if later done the road that heifer showed well and she happened to have a bull he may be selected for a prospect sire. And if the sheath issue prohibited his ability he may not be a very good sire. Keren, can you answer my question in the first sentence of this paragraph? Thanks!
Two good lookin calves. What are the plans for the heifer?