The difference between good and great is usually pretty obvious to former colleagues who are now at a new company that's hiring.

That's true, but are those colleagues allowed to talk about the work that the person did? At a lot of places, the only thing the manager can confirm is that the person worked there during the dates given on the resumé. Further questions are to be directed to HR, which will filter any genuine feedback the manager can give.

There's no objective method, but many experienced programmers are capable of using subjective measures. Indeed, such skills are a huge competitive advantage to established dev. shops with talent (hire the best, keep hiring the best).