It's a tough question that's impossible to answer. Music is not a competition where one needs to be "better", but there is a certain amount of skill/competence involved, and of course we all strive to play as proficiently as we can given our individual situations.
Here are some thoughts, the relevance of which will differ depending on everyone's situation.....
- When you're in a band, how many heads bob and butts move when you play?
- When someone puts a chord chart (or staff if you read standard notation) in front of you for a song you've never heard or played, how well can you pull it off? How about if they put a capo on the guitar and the chords are the capo chords - can you adjust instantly?
- How many styles can you play? For example, if you're playing a country song are you disciplined enough to play root-V for 3 minutes without any fills? If you're playing an unfamiliar jazz chart can you solo confidently? If someone wants to play a classic rock staple that you've never played, can you pick it up instantly on stage just from memory of hearing the song on the radio and looking at the chords the guitar player is playing?
- Can you sing backing vocals (or lead vocals) while playing, and not lose either the groove or your vocal intonation?
- How many recording takes does it take for you to nail that bass part?
- If you play a fretless, how is your intonation?
- Can you play in multiple styles? Slap/pop when it's needed, with a pick, with fingers, with your thumb?