Earlier quoted context omitted.
"jack of all trades" = superior product "master of one" = inferior product see also: Worse Is Better, Innovator's Dilemma
The difference here is that the better players also play a similarly wide range of formats (since it generally all comes down to libavcodec at some point), but due to various factors they overall do it better . I keep VLC installed for testing purposes and as a backup were my main playback setup with MPC-HC ever fail to play something, but I've never actually had to resort to VLC for this reason.
I guess the keyword is "similarly" here? VLC is the only player that plays all video clips from crappy digital cameras I owned over the years; out of the box, or with a million codec packs, neither VirtualDub nor Premiere nor other video players can parse them. I don't really care about those clips, and they sure are shoddy quality; but it always impressed me, VLC is quite the omnivore. It plays stuff even GSpot can't make heads or tail of. This might not matter for videophiles, who by definition would want their movies to be in a good and modern format, but still, yay VLC :)