The position which baalei teshuvah [penitents] occupy cannot be occupied even by tzaddikim [completely righteous] (Berachos 34b).
A surgeon once encountered difficult complications during an operation and asked his assistant to see if there was anyone in the surgical suite who could help. The assistant replied that the only one who was there was the chief of the surgical staff. "There is no point in calling him," the operating surgeon said. "He would not know what to do. He never got himself into a predicament like this."
As far as people's own functioning is concerned, it might be better not to have made mistakes. Still, such perfection makes them relatively useless as sources of help to others who have made mistakes, because they have no experience on which to draw to know how to best help them correct their mistakes.
A perfect tzaddik may indeed be most virtuous, but may not be able to identify and empathize with average people who need help in correcting their errors. The "position" to which the Talmud is referring may be the position of a helper, and in this respect the baal teshuvah may indeed be superior to a tzaddik.