He's not saying Hillary Clinton was a terrible person, or a terrible policymaker, or a terrible diplomat. He's saying she was a terrible candidate. Not everyone who's excellent at statescraft is excellent at convincing voters to elect them.
Yes, a lot of it has to do with the fact that she'd been singled out as the subject of almost three straight decades of calumny from the Republican Noise Machine. And, yes, that was totally unfair! But, as Bill notably said back in his time in the White House, "life isn't fair." It should be obvious to anyone who has followed U.S. politics over the past half-century or more that few things are more common than a nominee who would make an excellent president falling short because "the other guy seemed like the type I'd like to have a beer with." And, frankly, it's a death wish to run a nominee who is underwater in favorability ratings (even against an opponent who is a bit worse in that regard) when the demographics of the Electoral College dictate that a Democrat not only has to win by a little, but has to win by a lot in order to offset the advantage it gives to one's opponent.
It's not "defamation" to say that Hillary Clinton's skills in politics were nowhere near as good as her skills in governing would have been. It's why Al Gore, John Kerry, Michael Dukakis...hell, even Adlai Stevenson (twice!) failed to become president, while Bill Clinton did. And, yes, it speaks badly to the American electorate...but, if you expect to enact positive change for the American people, you better find a way to deal with that issue right up front.