In your second example, I get an exception (it does not "explode"), and this is also not a "bug". In your second example, the default search strategy is unable to derive whether above(a,c) is a logical consequence of the program. The existence of such cases is expected when using the default execution strategy (SLD resolution), which sacrifices completeness for efficiency.

A key advantage of using a declarative programming language such as Prolog is that we can change the execution strategy. For example, I tried your code in Scryer Prolog and added 2 directives as the first two lines to enable an execution strategy called SLG resolution instead of the default strategy:

    :- use_module(library(tabling)).
    :- table above/2.

    on(a,b). on(b,c). above(X,Y) :- above(X,Z), on(Z,Y). above(X,Y) :- on(X,Y).

Now I get:

    ?- above(a,c).
       true
    ;  ... .

So, with a different search strategy, the Prolog system is also able to derive that above(a,c) holds, like Clingo.

Note that answer set programming cannot help in any way when I need a program to perform side effects such as initiating a network connection, hosting a web page, parsing a file etc., whereas Prolog is extremely useful and appropriate for such applications. So, the fact that the default execution strategy of Prolog is not adequate to solve this specific example is not a sensible argument for or against Prolog.