"It is my personal opinion that Mr. Wittgenstein’s thesis is a work of genius; but, be that as it may, it is certainly well up to the standard required for the Cambridge degree of Doctor of Philosophy’
So, it was not seen as an achievement at all!
I don't get that interpretation from that quote at all. To me, the quote is about contrasting the speaker's subjective view with a more objective "standard" requirement for a PhD degree. It's basically saying: "To me, his work as that of a genius. But YMMV. However, even if you don't want to go quite that far, you'll certainly admit that it's great and fulfills the requirements for a PhD."
Not being the work of a genius does not necessarily mean that it's not an achievement.
Just because the thesis (http://en.wikipedia.org/wiki/Tractatus_Logico-Philosophicus) exceeds the requirements for the degree, does not make the degree insignificant.