Rosencrantz and Guildenstern are hopelessly incompetent. They are ordered by Claudius to spy on Hamlet, to figure out why he has been acting so crazy, but fail to show anything for it. Also, they fail to veil the fact that they are spies - as Hamlet quickly sees through their act. They are enlisted to get information from Hamlet for Claudius numerous times, and fail every time. They are the level of incompetence referred to in the quote.