I just finished (re)watching the episode a few minutes ago, and it's a personal favorite. But that bothers me a bit too. Afterall, the "real" Picard was kind, respectful, and listened to his crew, even those who were not on a high-flying command track in life, and surely in other contexts he would not say that there was anything wrong or defective about a life lived in that way.

But he was comparing it with his own previously lived dreams, ambitions, and experience. As someone who doesn't aspire to be famous, wealthy, a leader of many, etc., I don't feel it's a knock on me. I'm quite deliberate in choosing the life I have, particularly my family life. It's worth noting that Picard never had a traditional family life, which for some people gives life meaning. He gave that up for the life he did have.