It's a good question. I agree that he stopped caring about his guitar playing around 1983 or so and hasn't really progressed since then. Maybe he's even regressed.
Technically he was never very advanced, just concentrating on basic chords with the odd pentatonic stooges-like solo, but I think his sound in JD was really very good, especially live. As the sole guitar player in a 4-piece, without keybds or a second guitar to take some of the strain, he does a damn fine job of creating a wall of sound. But there's some subtlety in there too, helping to build tension (e.g Dead Souls intro, also New Dawn Fades). His technique is pretty rudimentary and I think his 'strumming from the elbow with a rigid wrist' technique may have held him back from getting better. The Shergold Masquerader makes an intersting sound - a bit more toppy than the SG, and nice complex harmonics too. That adds some unique flavour to his sound. Does anyone know when he switched from the Shergold to SG in Joy Div? I seem to remember him using the Masquerader into 1980, but I can't be sure.
In New Order his role is different and there's obviously less need for a big guitar sound amidst the electronics. He still does a good job on the live versions of the Movement material though.
There were some very good comments about the post-punk ethos of instrumental technique being unneccessary. It's true that many people thought that, but still the best groups had some unbelievable musicians (e.g. all of Magazine, McGeogh and Budgie in the Banshees) who found new textures rather than sheer virtuosity.