I will agree with you Clarissa, a lot of what Houdini did is up for debate.
From my studies though, I do stick to the view point that he was a great magician in skill. He had the knowledge, and when he was younger, he was quite skilled with close-up magic. As he grew older, and drifted from that, I'm sure he wasn't as good, and probably fumbled a little. His problem was that he didn't fit the stereotype of a stage magician. He wasn't refined. But once he started doing escapology, he flourished because he was an amazing showman.
As for the Dai Vernon quote; it also has to be remembered that Dai was a crude and rude man. He was very knowledgeable, and very skilled, but he was also a very rude person. There were quite a few magicians who passed up learning from him because of that reason. This isn't an insult to him, because I'm sure I would have liked him, but he did bad mouth a lot of people. It was just his personality. Oh, and I think I should mention that he had a reason to bad mouth Houdini anyway; Houdini shunned him.
I love reading well reasoned arguments. I think as with all things, the truth lies somewhere between the two extremes. Some say he was a god, others say he sucked donkey balls.... maybe he was a god that suicked donkey balls? Or maybe he had his on and off days... just like the rest of us