Although Jean-Luc Picard is a Sexy Older Man, and I respect his captainly-ness, Luffy is, as others before have pointed out, a wonderful leader. Though not really on purpose or through any other sort of skills. It's just his personality.
Luffy ISN'T a great captain. Yet. He's still getting character development in that sense along with the other crew members. I mean, the first time he actually asserted himself in his role as captain was on the Baratie when he ordered Zoro and Usopp to get Nami back.
In Drum, Vivi showed him that he has alot to learn about diplomacy, and that he can't always rely on pure instinct and brute strngth to get himself through a situation.
The fight between Luffy & Usopp, and the chapter entitled "Captain" were meant to point these things out - Luffy is still feeling out his role as captain, and there are times when the crew HAS to listen to him. A large portion of the problem between Luffy and Usopp was Usopp's inability to see Luffy in that respect, and Luffy's abrupt decision to assert himself as such.
Luffy will develop more as the story progresses, along with the others. He has already become alot more serious since the series began, without comepletely losing his characteristics as a goofy easygoing guy.
Fighting skills/power-ups =/= character development