No, you're not wrong. Better and cleaner (assuming it's done right) and it can pass smog too. The trouble lies in what engine/donor you choose to use parts from. Right now they don't bother to check that your '76 is actually sporting a '66 engine (a big no-no), but they will as soon as they see the EFI stuff and send you to a referee station to get a certificate of compliance. You might even have to change your engine block at that point.
You're only allowed to use the same year or newer engine in your rig, so a '66 engine (even if it meets the emissions tests (which it obviously has in the past?), it won't meet the visual.
The reason you need to worry about which donor you use, is that you have to use literally everything from that engine system to be legal. Member 904Bronco here just did it recently and his Mustang donor became a small nightmare when he had to use the exact airbox and exhaust system from the Mustang. That meant 4 catalytic converters and three trips to the referee to get it passed. Big hassle, but it got done. Runs like a champ too, and probably gets better mileage and makes our air easier to breathe.
He'll probably see this soon too, and chime in with corrections/additions to all that.
Then again, at least part of that hassle was the referee being a butthead. There's no reason he should have had to keep the exact Mustang-specific airbox/filter arrangement. Nor the vacuum reservoir that feeds nothing on the Bronco, simply because it was original to the Mustang. Just being a butt.
So pick a donor that gives you what you want. The least amount of under-hood junk, and the fewest cats. Not because it's better, but because it's less of a hassle. And 4 cats can get damn expensive!!!!! Not that you necessarily have a money issue. It's just that, why spend it if you don't have to, right?
Good luck. It can be done. Just read up big time. Do a search here for EFI threads, or specifically those started or contributed to by 904Bronco.
Paul