When people refer to British Art they are not referring to something necessarily brilliant, though this possibility isn't definitively ruled out. The idea of British Art has an affinity with the idea of British Cooking. Some of it may be very poor, but this isn't an inevitability. Referring to British Cooking is not the same thing as referring to Italian Cooking, for example, which is generally considered to be unambiguously good; or Italian Art. The usage is different. For example if Balzac had written to Stendhal:
"what I do, is I do these frescoes; but you, my friend, have made British Art"
Our soldiers, returning from Afghanistan, are to be presented with the best of British Cooking, and the best of British Art.
But Britain did have a sophisticated visual culture at the turn of the Nineteenth Century, best exemplified by satirical cartoons. If these works don't convince enough people, or the right people, that they qualify as art proper, it's probably on account of the absence of obviously irreproducible skill, their opacity to modern viewers, and their puerility. The preponderance of figures engaging with the viewer also plays a part. If, in the style of Garfield minus Garfield, these figures were erased, at least some of these pictures would come across as great modernist renderings of the capitalist city, with the objectivity of Hiroshige prints.