But, y'know, regardless of the environment, what does it say about your
    abilities that your employer didn't consider you essential?

I think it depends on the company. If you're laid off from from a small or medium sized startup, with more or less one product, then I can understand how being laid off can be seen as a reflection of your skills (or lack thereof) as an engineer. But if you were laid off from a larger company, all it means is that some director saw a team (or teams) which were working on more speculative projects, which could be axed as a way of saving money during a recession. It doesn't mean that you're an unskilled engineer. It just means you were unlucky enough to be in the wrong place at the wrong time when the ax fell.