?
It's actually pretty fucking good at it since they redesigned it more than a year ago.
In fact, I can't even think of any competing service that comes close the type of sorting/organization allowed by Steam's "collections".
It's better than the console UIs, to be sure, but it's still severely lacking in critical features for organization like the ability to rename and specify "sort-by" titles (unless the publisher does so). External library apps like Playnite address most of those deficiencies, while also accommodating multiple launchers (with automatic syncing), ROM collections and even console titles.
Somebody already mentioned a series like Final Fantasy. Just look at this hot mess:
No proper casing (a Japanese translation thing, I know, but still unacceptable for a game released in English), sorted strictly by alpha-numeric with no accommodation for Roman numerals (but somehow FINAL FANTASY IX ends up being sorted vaguely correctly out-of-alphabetical-order). Not to mention poor old XIII part 3, which is pages away in the L's
Compare that to Playnite, where not only can I do a high level grouping by "Series" but completely control my sorting and title naming, as well as integrate the entries from ROMs or on a console, but also track data points like Completion Status or it being a remaster with multiple other versions of the same title