"Good artists copy. Great artists steal" plays on a truth that whenever we build something new, we're really building upon what's currently there, and that ought to be acknowledged and embraced unashamedly. It provocatively contradicts a pure notion of creativity we pretend is the case publicly. The quote says actually, we all know privately how it really works, and it's OK!
Copy and steal stand for opposite ends of the scale in the creative process. Copy being to borrow an idea for its known useful results, steal being to take ownership of an idea and extend it to create some novel result.
It's very important to note that while more skill is implied the further you go towards stealing, copying is not bad. On the contrary, it's explicitly good. An artist needs to do both. The question becomes, when to copy and when to steal?
I used to work with someone who, when the team would discuss how to build a new product feature, would by default suggest finding a similar feature in a market leader's product and start by copying their approach.
This raised some eyebrows. When your job is to design and build product features, instinct tells you that taking this approach is not doing your job. It's intellectually dishonest, arguably immoral. Anyone can copy, but you're better than that - you can create!
But this person had the right idea. The counter instinct isn't wrong on the whole, just misapplied. You do of course need to extend and put your own spin on ideas. But that's really difficult, and your budget for doing it is limited. You don't want to waste it building the mundane, functional platform on which the interesting stuff sits.
You don't make a whole cake out of icing - you don't even start there - you make the sponge base first. That's exactly what this person was saying. Copy the same sponge any cake could use, then use your own creative talents as icing to make something uniquely great in the areas that make a difference in your product's niche.
What qualifies as mundane? As a rule of thumb, techniques or tactics for realising strategy - focused solutions to isolated problems that don't matter on their own, and can be reapplied for similar results without much dependency on context. If your goal is creating something new in the world, don't copy strategy. Steal strategy! Copy tactics to get the platform in place to realise that strategy, then focus all your creative energy there.
Get out of the mindset of copying being a fallback when you've failed creatively, start using copying as a pragmatic tool to facilitate creative success.
Great artists steal, but know when to copy.