Different pianists have different strengths. Cortot, a pianist known to make a lot of errors and was considered inferior to Horowitz by most, played a certain piece so fast that Horowitz studied with him, just so he could discover the "secret". Horowitz, particularly when he was young, had high standards, so if he gave up on a piece due to technical challenges, it's probably because his playing didn't meet those standards, standards few could hope to attain. I think Horowitz' retreat from public performance and use of anti-depressant medication was a reaction to his loss of the insane powers of his youth, a loss that he supplemented with increased depth of interpretation/nuance, and occassionally with sloppy performances (Ormandy Rach 3). Despite the flaws of that recording, when I heard it as a kid, I was amazed. I was new to classical, and Horowitz' playing made a powerful impression.
I prefer Rachmaninov's performance (stupid cuts aside) of his 3rd concerto over Horowitz', but Horowitz is much better than Argerich even in his least impressive incarnation. She has a nonchalant "toss off" attitude in her performances that drives me nuts, with the exception of the outstanding performance of Liszt's B minor sonata in her debut (although Horowitz' performance is far superior).
Horowitz was flat wrong about the Rachmaninov second sonata, too. The original version is better than his or Rachmaninov's efforts at revision. He was also wrong when he said the 3rd is his best concerto. The 2nd and 1915 (or 1927) 4th concerto are just as good, although not as pyrotechnic.
I don't think we can truly measure his greatness because we don't have a recording of his exam performance of the original Rachmaninov second sonata where all the judges stood on their feet for the first time in the history of the school.
Rubinstein's 1st Chopin ballade is better than Horowitz's, I think.
As for the "Horowitz craze", I think the digital sound divide will gradually phase him out, even though he's already been phased out by the stereo/mono divide. Most people I know who like classical won't listen to mono recordings, and will choose a lesser digital performance over a superior analog. This is especially an issue with symphonic recordings. Mono symphonic recordings don't sound very good. Luckily for pianists, the piano fares a bit better. Another problem for Horowitz appreciation is that younger generations can't see him perform, except in video.
Listen to his performance of the Scriabin 10th sonata. Then listen to Hamelin's. Then, ask me if it's a craze...