Aside from Derpy’s eyes, it’s not 100% clear whether Derpy got worse or the others just got better. Rainbow Dash’s own climb to the top from the very bottom and the fact that Derpy doesn’t look at all down anywhere in the sequence does give the latter some credence.
 
Also, out of all the ponies to be in the bottom rung there, Spitfire’s the only one who looks disappointed about it. Must’ve been a particularly off year for her.

Oh geez. I wasn’t ready for these feels.

yamete

Poor Derpy. The her eyes :’(

So Derpy being Rainbow Dash’s replacement in Rainbow Falls is quite logical as she USED to be good flier she really was best reserve they had.

Hello darkness my old friend…

Deepest lore.

A Derpy timeline.

This is surprisingly sad.

@SeraphimDawn  
Then she tasted gold and there was no going back.

@Background Pony #7984  
Derpy truly is best pony.

Yet despite everything, she’s just happy to be there.

I…oh…wow that’s um…I wasn’t ready for this.

I’ve noticed only after i saw the episode for the first time that Derpy was the best winner, then the second and so on.  
Man that’s deep….

@621Chopsuey  
And also faster than Spitfire 0_o

@621Chopsuey  
Considering her physical abilities utterly destroyed town hall completely accidentally, I’m willing to believe it.

Processing the fact that at one time Derpy was faster than Lightning Dust.

@Wcctnoam  
Gonna agree there.
 
Character made and loved by the fans with keen eyes has her story told specifically to those fans with those keen eyes.

@Daneasaur
 
Sorry, I didn’t mean to imply that Derpy’s life is a tragedy or anything (I did say “bittersweet”), just like AJ’s or Scoot’s aren’t. I’m just saying that there’s a sad story there to be told that never will, because the show doesn’t need to. Being given the happy moments and small hints of the truly sad ones is the perfect balance for MLP.

@Daneasaur
 
yup!

@Wcctnoam  
Lets not forget two significant moments in her past.
 
Remember when she dominated the cart Competition?
 

 
So she didn’t lose her skills, but then she DID try to have the problem attended to.
 

 
It fell through, obviously, but she’s still one of the happiest ponies I’ve ever seen.
 

 
And has someone who really does care for her.
 

 
So she really has it far from being bad.

Lightning Dust was satisfied with second place in the first part.

@Background Pony #A05E  
Goddammit, don’t do this to me.