My personal take on all this is that Kevin Mitnick once was a hacker, good but probably not even that great (he did get caught, remember) who is now minting his newfound reputation.
These kids prove that his reputation is somewhat less than he presents it to be and he's pissed off about that.
There is a proverb in there somewhere: High trees catch lots of wind...
AT&T is a bunch of weaklinks for terminating his account (same goes for his provider), they should secure their stuff with or without Kevins help. To terminate a user because they 'attract bad people' is ridiculous, imagine your bank telling you that they can no longer take your business because because of you the keep having burglary attempts. It's too silly for words.
I think you're right that he wasn't all that great - IIRC, he mostly got into stuff by getting information out of people.
However, the kids aren't proving anything - they're hacking other people's systems, not his.
It means that a lot of people that you are putting down will see you as their prime target. This goes with the territory.
If KM would have taken a job as a programmer somewhere I highly doubt that this would have happened. After all, he is minting his reputation as a former bad guy, nobody forced him to do that.
If he had been a white hat all along it would be different, but a burglar complaining he's been burgled is a bit hypocritical imo.
I guess it sucks being on the receiving side.
Basically all these little jerks do is make him look silly, personally I wouldn't even bother to respond to them, just take it as praise and laugh at it. By taking it so serious he is actually fanning the fire.