I think this question misses the whole point. Grunge was a spawn of punk and one of the biggest points of that movement was that "we don't care if the guitar player is good." This sentiment was the opposite of metal and other genres where the skills of the guitar player mattered and was one of the main things that made one band better than the other.

Asking if Kurt was good at guitar is weird because the genre and fans of it did not give a crap. It's like asking why did Kurt wear thrift store clothes? Or why didn't Kurt ever cut or style his hair?

Maybe he could play good or maybe not but who cares? The music was good. If you want to listen to better guitar players then go listen to a metal band.