Often with a Pratchett joke, if I don't 'get it', it is worth asking myself what Pratchett knew that I didn't, and the text often gives me a clue where to start looking. And the same applies here, though I don't know which text is Pratchett and which Gaiman.
Fourteenth-century minds, the lot of them. Spending years picking away at one soul. Admittedly it was craftsmanship, but you had to think differently these days.
P/G point us at a time period and associated quality and tell us that the mindset is out of date.
If craftsmanship is dated, what replaces it? Mass industrial production. And where was one of the cradles of the Industrial Revolution? Manchester.
Friedrich Engels was the son of a German manufacturer and worked as his agent in their factory in Manchester. Here he developed his strong social conscience from his real experience of the city. This resulted in his work The Condition of the Working-Class in England in 1844, in which he writes:
Such is the Old Town of Manchester, and on re-reading my description, I am forced to admit that instead of being exaggerated, it is far from black enough to convey a true impression of the filth, ruin, and uninhabitableness, the defiance of all considerations of cleanliness, ventilation, and health which characterise the construction of this single district, containing at least twenty to thirty thousand inhabitants. And such a district exists in the heart of the second city of England, the first manufacturing city of the world. If any one wishes to see in how little space a human being can move, how little air - and such air! - he can breathe, how little of civilisation he may share and yet live, it is only necessary to travel hither. True, this is the Old Town, and the people of Manchester emphasise the fact whenever any one mentions to them the frightful condition of this Hell upon Earth; but what does that prove? Everything which here arouses horror and indignation is of recent origin, belongs to the industrial epoch.
I think the fact of Manchester's history is enough to explain Crowley's satisfaction with it, but the highlighted quote underlines the connection that P/G may have been making. Pratchett's later works Dodger, Snuff and Raising Steam all have strong themes of social justice and reinforce the idea that he would be familiar with Engels' work.
A couple of potentially corroborative details:
One of the worst areas was called 'Angel Meadow';
Engels translated to English is 'angels';
Crowley and Aziraphale are, of course, angels.
All of which leads me to conclude that this mordant reference isn't really a 'joke'.