A lot of works that were under-appreciated during their time had their extemporaneous advocates and promoters that had their own motivations that often had little to do with appreciation for the work.
If Kafka's editor had listened to Kafka and burned his works instead of making sure they got on as many bookshelves as possible, or if Van Gogh didn't have the close relationship he had with his art-dealer brother, we almost certainly wouldn't remember their works today.
I don't doubt their are many unknown masters ahead of their time that will forever remain in obscurity.
However, it might be that time actually has a false negative rate of 99.9%. Almost all of the great old books are filtered out by time. In that case, time probably sucks as a filter. But then again, if your only goal is "read only great books," time is still a useful filter even if it has a terrible false negative rate, since it's irrelevant to you that there are lots of other books being excluded, so long as you get a sufficient supply of good books.
>Ernest Hemingway was deeply impressed with Markham's writing, saying "she has written so well, and marvelously well, that I was completely ashamed of myself as a writer. I felt that I was simply a carpenter with words, picking up whatever was furnished on the job and nailing them together and sometimes making an okay pig pen. But [she] can write rings around all of us who consider ourselves as writers ... it really is a bloody wonderful book."
There are bad books nobody liked at time and never again. But when seemingly bad book was popular, then it likely filled some need or said somethig they wanted or needed to hear.
The overall point remains valid, however.