Aikido and teaching are two different skills. To be deficient in one is not to be any less skilled at the other.
Besides, I'm not convinced he was a bad teacher. "He never trained someone up to his level." First of all, what is his level? Only he would know that. Second of all, how is he supposed to teach all of his knowledge and experience? Everything we know is connected to everything we are. That's how we learn. We build on associations. Somehow, your kindergarten math skills are connected to your college algebra skills. If you're going to teach someone absolutely everything you know about math, you'd have to start them there. The long and the short of it is that it isn't that simple. Experience can only partially be transmitted in word or teaching. The rest is your own experience, which changes the teaching recieved.
And yes, the people who worship him blindly, as with any figure, are nuts. I haven't run into any of those people though. They usually reserve that kind of thing for their shihan. In any case, the best thing you may be able to do is ignore those people and carry on, though it doesn't hurt to find out WHY they really feel that way. (shrugs) Sometimes they aren't as nuts as they first sounded.
Your original question is, "Is O Sensei really O Sensei?" Of course. "O" is an honorific showing great respect. He did some pretty amazing things (including creating a martial art), so he's earned a little something as recognition.
It's that simple.
What kind of person he really is is another matter. It's one thing if he's an obvious and selfish hypocrite, or an egoist out to aggrandize himself. I've seen a few. From what I've read, O Sensei wasn't that. Yup. He was a man, and an imperfect one at that. Just like everyone else. Does he really have to be perfect to be O Sensei?
Heh. To throw in a psychology parallel, Sigmund Freud basically created and founded modern psychotherapy and psychology. Yeah, he was a sexually-obsessed nutbag and an irascible bullheaded jerk who would never change his views. But he's still the founder of modern psychotherapy and psychology, a relatively new science, and you have to respect that.
Don't forget, as some have already pointed out, that comparing levels of skill is the essence of competition. Competition is not Aiki. Anyone who calls him the greatest aikidoka is missing the whole point. Don't let your mind dwell there.