In my view, before jumping into this topic, we must first differentiate between being a good MUSICIAN and a good GUITARIST.
The difference might not be apparent at first glance, but the 2 terms actually have totally different connotations.
When evaluating musicians, we consider aspects like compositional ability, creativity, and overall quality of their pieces. Since we all know that individual tastes differ and that there is no hard and fast rule as to what constitutes 'good music' and 'bad music', it is a purely subjective topic which no one can pass judgment on. I loathe pop-punk bands like Good Charlotte, but that does not make them bad, because many others enjoy that kind of music. The music moves and gratifies them, and that is all that matters.
However, evaluating of 'good guitarists' is a different thing altogether. It is a purely quantitative process which can be reduced to an indisputable conclusion, with the aid of relevant evidence. The term 'good guitarist', essentially means a good instrumentalist. And by that, we are referring to a person who is proficient in his instrument. In guitar terms, we are talking about someone who has total command over his axe, and who has the technical ability to fully express his emotions into the music he writes. Good technique broadens horizons, whereas the lack of it will set constraints. Someone with the phenomenal technique of Rusty Cooley can express whatever he wants to say in his music, without being restricted by technical limitations. This is a catalyst for creativity, for he can do whatever he wants.
Kurt Cobain is revered as a great musician, but he was indubitably an under-developed guitarist. Michael Angelo is trashed for his crappy songs, but he is doubtless a very good guitarist.
To me, Steve Vai strikes the perfect balance between musicianship and technique.