I don't know that they ruined being a captain so much as they helped him redefine his priorities. He's realized that his career isn't everything and that there are other things in a person's life that can be worthwhile. I agree that he's a more complete character than Kirk at this point: Kirk could never let go of the Enterprise, the biggest reason why he was never able to settle down and have a normal life. I suppose he was never meant for that sort of thing, but it would have been nice to see him finally find peace somewhere else besides a command chair.
I always felt that was an interesting element to Star Trek 1, 2, 3, and 4. That Captain Kirk, yes, is still worthwhile a Starship Captain (and may be why Picard is able to continue operating one well into his seventies) who was "kicked upstairs" way too soon and may have been a lousy Starfleet Chief of Operations--it still was treated him as being grossly immature in places. Seeing the Peter Principle in play for Captain Kirk, of all things, is darkly humorous.
Having Picard deliberately not go that route works for me and helps further contrast the already distinct Captains.
Khan Harrison wrote:
I heard an interview with David mack that he had written the perfect death for Jean Luc Picard but that it will never see the light of day. I kind of wish we will see the end of his journey. i don't want Admiral or Ambassador Picard.
Maybe he can throw it in one of his books using time travel or a vision of the future.
I actually think Admiral Picard would be better than in Kirk's case. Then again, I think Kirk would have been fine if Starfleet had "mobile Admirals" commanding the fleet "in the field." Sadly, Starfleet just wasn't large enough for that way back when.