I totally know what you're talking about, it hits you right in the heart when someone younger then you blows you away in technique. Not that I've experienced it personally, but I have heard early teenagers (13,14,15 etc.) with some nasty chops on guitarwar.
educated I think you hit it dead on when you said that learning curves grow at this age, and the added maturity gives you a huge advantage. By dedication and smart practicing, in about a year i overtook guys who had been playing for years. Some got pissed off when they learned I had only been playing for a year ;).
But not matter how good you are, there's always someone who started earlier and plays more. I've learned to try and develop myself musically as effectively as I can given the amount of time I can commit. I recognize that I simply can't play as much as Steve Vai did.
But this is music, just set goals for yourself and find your own niche, that's my philosophy.