(I was going to write a short "bummer, keep your chin up, hope it works out..." reply... instead you got this pile of waffle... sorry! :lol:)
+1 to a lot of what other people have said... especially the stuff about what the intensive practice etc has done for you personally.
Remember I'm vocalist, though, folks :lol: - This git might well have had quite valid reasons for wanting to stick with what he/she knows if he/she can still hang on to it... HOWEVER, look at it this way: "It's their problem, it doesn't matter a bugger why they made the decision they have... they just have, and they can keep it..."
On the question in the title - I have given up playing guitar in the past, totally, for a couple of years. I thought it was for various reasons, but in hindsight it was because I hadn't realised this at the time:
it's all about the fun mate, do whatever you enjoy.
It's so easy to become a slave to anything we do, whether we do that thing because we enjoy it or not. But it's a real surprise to discover that something we do because we thought we enjoyed it, and because it's "what makes the days worthwhile" (music to most of us on here I guess), is what is actually bringing us down...
I gave up for a couple of years, but I needn't have left it that long if I'd realised earlier that it wasn't the guitar playing itself that was getting me, but the expectations I was bringing to it that were depressing me so much...
Have a look at why you're playing, what gives you the jollies, explore what's in your control to make it seem worthwhile again.... I'd be quite surprised if you discovered that there's no point at all in carrying on.
I have to admit that I'm in a totally different position to you and a lot of others on here. I've discovered that I don't actually
need other musicians to do what makes my bell ring. In some areas, other musicians would make some of the things I want to do so much easier. But, in general, my experience with bands over the years means I actively do NOT want the involvement of any others (musicians, promoters, pub-landlords, etc) in my music at the moment, perhaps never ever again... I've never been happier with my guitar-playing and music than I am now, just piddling around being a one-man band and making my stuff available for free on the internet.
However, I fully understand the position you're in. The other guitarist in the last band I was in 10 years ago is in the same boat - without lyricist, singer, bassist, drummer, etc, he felt couldn't actually do what he enjoyed doing so much.
Think about what drew you to the wretched thing (the guitar) in the first place, what kept you spending (time and money) on it... are these things gone? If not, concentrate on them for a while, everything will fall into place, mebbe not in the way you're expecting at the moment...
Good luck :D
Btw, I don't feel the need to play live anymore, but if I did, I love 38th's suggestion about open mic nights, it sounds like a really good idea to me. There is so much talent out there, go and see what it's doing and the effect it's having on an audience... chat them up, see what they think they want...