Nicely said.

"Mary Sues are played, not made" is a common mantra at various communities that review RP profiles (not just WoW). A character--and their player--has to be really wildly over the top and honestly rather selfish to be a Mary Sue--it's not automatic because someone's a hero or awesome at some skill. Some people--especially inexperienced RPers--don't realize they're doing it at first.

The term gets overused a lot by people who think that -any- character who isn't Plain Jane normal guy who wants to just farm or tend shop and gets by on wits and skill rather than powers and charisma must be a Mary Sue. That's not so.

Characters have to be interesting for people to want to both tell stories and read about them. They have talents and flaws, good points and bad, they win and they lose. Most people, even those playing Big Damn Heroes, really do get that. It's OK to have a pretty, wealthy, royal character with some special secret or power. Just share the spotlight with other PCs and have some losses and flaws, and make them actually mean something. It's more about the balance of character and story in play than about how powerful/pretty/wealthy/cool the RSP says the character is (though some RSPs are pretty wild and give the impression of Mary Sue, but that's a whole other can of worms topic).