How do you know when you're good enough? When your voice is distinctive? When you have an original plot or a new twist on an old one? When people other than your mom, sister, spouse, or best friend like what you write? Honestly, I don't have a clear-cut answer.
Some days I read what I write and think it's good stuff. Other days, I'm sure I'm deluding myself. Clearly, I'm not the go-to-girl to judge good enough.
Is a contract a validation? For most, yes. But there's always a bigger, better publisher to net. Maybe it's the number of contracts that counts. If that's true, the more prolific, the more successful, right?
Then there's the indie authors. I know indie authors who are some of the most successful writers I've seen. How do they know they're good enough? Number of downloads? Money earned? Number of POD books sold?
The reality is there's no such thing as good enough. Craft and skill only get you so far. In my very humble opinion, you're good enough when you're brave enough to put yourself out there, whether it's to a crit partner or an actual submission. Every step brings you closer to your goal, and if you get a publisher's nod or not, you're working toward your dream, and that's good enough for me.