Not only does it not matter that the Pale Fire poem is not any good, but it needs not to be any good if the novel is to work. The madness of the commentary does not redeem the poem, but requires its mediocrity; mediocre art may sustain a work of critical ingenuity that, believing itself to be parasitic or symbiotic, is independently creative in itself.
What matters is that the poem has become an occasion for what might, by the standards of fictional world in the novel, be a delusional account of an imaginary realm—but which might also, and for the novel to work this need remain a real possibility, be a delusional account of a genuine realm, or even a genuine account of a genuine realm, narrated by a commentator whose only delusion is in believing the poem could speak to his own experience.
Solipsism is not a red herring in Pale Fire, but it is not the destructive and cruel condition that presents in Lolita. Here the solipsistic voice is to be pitied—not because his isolation from reality is sure, but because we have no way of knowing just how isolated he is, though his extreme isolation is never doubted. The novel offers a possible fiction within a fiction, without the means of placement, and that is the more awful remove: from the possibility of assessment.
But our assessing the extent of the narrator’s delusion, our knowing the extent of his isolation, ceases to matter, at a point. Unless he were responsible for the death of another (and he is not, so far as we know), and unless his delusion were destructive or cruel (and there is no evidence that it is), we only need to know that he is isolated, even in the history he constructs or presents. Both Lolita and Pale Fire are about men who are unable to imagine others; but Pale Fire is a tragicomedy, rather than a tragedy (though Lolita is funny, too), closer to Pnin, and of the same Ithacan community. Kinbote, however, is not only unable to imagine others; he is unable to imagine that others might misunderstand or fail to imagine him. Humbert offers a defense, recognizing at least most of the grounds on which he is accused; Kinbote’s moments of exculpation and explanation throw him into the greatest doubt.
Ithaca is ironic, because it’s a novel not about homecoming, domesticity, and the heterosexual family unit, but instead about exile, queer love, queer history, queer desire, and queer reading, though Nabokov likely thought he had found enough of the latter in the English department at Cornell. But the beautiful generosity of the novel is that, as scrupulous and thorough as Nabokov was when annotating and reading, as committed to the sense of fact, he here recognizes that a desperate attachment to fact might be determined by the most intensely private experiences, and that the facts themselves might belong to nowhere recognizable to anyone other than oneself—it is possible that none is available to say with any certainty whether they are real or not, whether they are true to one’s own experience or not.
The novel is most challenging for putting us in the position of having to callously dismiss Kinbote as a straight-up madman; or else to concede that there must be something there, but not know what it is. To find the novel moving, though, we need only recognize the desperation he feels, beneath the liberation from a common reality. He is not free from the life he has imagined he must hide from others; whether that life is real, the attachment from the life and the fear of revealing it are.
Critical Provisions 
Can we juxtapose your claim here that Lolita and Pale Fire are about men who are unable (unwilling, perhaps even more) to imagine others with your claim yesterday that Nabokov was interested in art as a way of bringing into being an ordered, classifiable world? It would suggest, I think, that what makes that world pleasurable and terrible is precisely that it isn’t adulterated or fucked up by the presence of others in their messiness and unpredictability. In this way the “smothering of life” that you identify in Nabokov’s critique of his own positions, of his own desire even, could maybe be more narrowly characterized as the smothering of other people, of other claims to acknowledgement — and as you suggest with regard to Kinbote — of other claims to and modes of intelligibility.