After having worked at the company I'm at for several years, I've seen quite a few mediocre programmers flounder at the same level for quite a while, none of them particularly improving.

I think the same things that keep someone from improving their skills are the same thing that make them a mediocre programmer in the first place. There is a difference between working hard at your job, and working hard to hone your craft.

Exactly. A mediocre programmer may have the ability to become a great programmer, especially if he or she has the people skills that allow him or her to learn quickly, and if your other programmers are willing/able to answer questions and mentor the person.

Nobody becomes a great programmer overnight. The key is to find the people who will grow into the position and then help others do the same.