What defines the gap between a successful musician and a unsuccesful one?

Foreword
I came up with a theory regarding failure/success in the music industry. I believe that a musicians failure to become noticeable is not due to their lesser talent, but rather due to their mentality and inability to understand what defines the success of a musician.

Part 1
Alright, I'm going to start with an example. Lets say Joe has been writing songs and playing guitar for seven years, to no avail. Even within his 'scene', his music is considered to be poor quality. He either thinks that 'his melodic sensibility and natural talent can't improve with hard work' or that his peers just don't understand his 'style'. His excuses sound valid at first, but after further investigation, I've begun to think otherwise. His first excuse states that he's reached his potential barrier. Whether this exists of not, I don't know, but this is unimportant. If you like music that other people like, chances are, you know what sounds good. To be able to recreate this isn't just a matter of grinding hours one after another, but analyzing what your final product turns out to be. If you have high expectations for yourself, succeeding musically would be much easier, and if you don't have high expectations and a will to improve in the songwriting sense, then it will be much, much harder. Why? Because you'd be content with yourself much sooner, and not urge yourself on to improve. His second excuse states that his peers just don't see understand the quality of his art because it is 'different'. Most likely, this isn't true. Talent is recognized, and if you do anything exceptional, people will notice. If its musically or lyrically exceptional, people will see that, and success is likely to come UNLESS the musician fails to understand the dynamics of the music industry (explained in Part 2).

Part 2
Lets say that Joe actually does play good music now. However, even with his high expectations and a crystal clear understanding of how to write a good song, he still isn't noticed. Lets begin with another example. Say he publicizes daily through myspace and posters on telegraph avenue. These promotion techniques simply do not work. From observation, the most effective form of promotion is by playing shows with slightly larger bands, which will attract people with your now (exceptional) music. Through the word-of-mouth, fame will (theoretically) come. I obviously don't know about every scenario, but once again observation is pretty convincing (expansion in part 3).

Part 3
Lets say Joe is now moderately successful, and has a fairly large fan base. From now on, its up to his originality to define whether or not he can succeed on a greater scale (a.k.a hopping on to a record label and going on tour). From here on, I seriously have no theory on success. Unfortunately, I haven't seen this far.

All my ideas here are theoretical. I'm not trying to imply that they're right, so there's no point in denying my statements. If you'd like to give me a take on your own, feel free to.