In other words the term 'the greatest' is just BS to begin with.
Mostly, yeah. But one slightly less BS-ian way of judging "the greatest" is to measure players by how much better they were than their contemporaries. For instance, Babe Ruth is widely considered to be the greatest player in the history of baseball -- not because he would destroy the opposition if he were magically transported to the twenty-first century (in truth, he'd probably be a middling relief pitcher) -- but because, given the same playing conditions as his contemporaries, he utterly dominated them.
Of course, this method has it's problems too -- Ruth had a large field of competitors, for instance, who weren't allowed to play the game at the same level as him. Still, if we have to try to judge who's the best in a given sport over a long period of time, it's probably a better way than most.
I don't know anything at all about tennis, but if Federer really can't beat Nadal, it seems odd to call him the best. Then again, there was probably a third-rate pitcher who struck Ruth out all the time, but gave up monster home runs to Jimmy Foxx. So who knows.
Like the man said: BS. But amusing BS.