Here's what I think.
This is the American Idol talent meter:
There's "You are the singer to beat", then there's "Your vocals were spot on", followed by "It was good", and "It was aight" at the neutral side. Then there's "That was not good, dude", "second-rate bar performance", and "absolutely horrendous".
Finally, there's Sanjaya.
His first performance on stage was when he ironically bored us by singing a Stevie Wonder song with the lyrics "I don't wanna bore you". He followed this up with a performance that felt like a "ghastly talent show", with a voice as small as a mouse' and an oversized suit. Yes, Sanjaya fans, I acknowledge the fact that he never sings off-pitch. We got to give him some props for that. Here are the props: Sanjaya, you CAN sing... just make sure it's during family reunions, school recitals, those types of events.
Now, singing shouting the Kinks' "You Really Got Me", Paula and Randy felt he was having fun and felt it was his best performance yet. That just means that currently, he has finally reached the "absolutely horrendous" spot.
Bravo, Sanjaya. You really ARE getting better.