Though I used a hypothetical very average competitive shooter as my example, my benchmark for good groupings (3"@25) isn't based on a bell curve. It's really based on what I believe is within reasonable reach for most shooters, within a reasonable time frame, given the motivation, some good instruction and quality practice. It's got nothing to do with how much better than average one is, or how "bad" the average is. IOW, if those in the 50th percentile - or even the 95th - are "bad", it's not because of the bell curve - it's because they haven't achieved what they're likely capable of in the right environment.
I think the definition of "good" inherently DOES depend on what "average" is. Good is not based on what is within reasonable reach, since "reasonable" isn't even the same for everyone. Not everyone can afford lessons and to go to the range 3x a week. So if we establish that good is better than average, the only remaining question is what subset of the population you want to sample for determining your average. Take it from competitive bullseye shooters, okay, 3" at 25 yards may only constitute adequate. Take it from the general population of gun owners at my local range, that would be probably awe-inspiring, and people would come up to you and ask for advice.
It is only natural to want to compare ourselves to our peers. Just as long as we don't delude ourselves into thinking we are all that and a bag of chips because we are the best shooter at the range that day. It's the whole big fish little pond concept. And we should all strive to improve, but I don't think it would be good to have new shooters see this, and someone says that 3" at 25 yards is what constitutes respectable, and they are having a tough time achieving 3" at 7 yards, then they get discouraged and lose interest.