Playing the guitar is something you really need to keep doing in order for your abilities not to fade away. I don't think that has anything to do with age, I realize Mark is 63 years old, but when I look at those clips from the Guitar Stories program, he still seems very much able to play as well as he did in the past. To see him play along with the Sultans of swing demo proves he can still manage that. When John Ilsley asks him if he can still play along to the demo, Mark answers something along the lines of "You bet I stil can."
I do'n't think it's a matter of Mark not being able to play like he used to, but it seems to be more a matter of him actually wanting to.
Plus, he may not always come up with great fast paced licks and riffs and all that these days, but he is still more than able to come up with beautiful guitar work.
His guitar skills did not fade away, he simply uses those skills in a different way.
Maaike