It means that someone who buys a fancy power cord with the expectation that it will cause an improvement in sound quality will perceive an improvement when they go and plug in the cord. I believe (based on my understanding of sensing & perception and cognitive psychology) that this person genuinely does perceive an improvement. I think it's important to recognize this.
It just so happens the improvement was not due to a change in the stimulus that reached the persons ears, but rather due to their perception of the stimulus. In my mind this is not a failure of perception but rather a function of the way our perceptive systems work. It underlines that our perceptive system is more complex and more easily swayed than most seem to think.
It sounded to me like
@Azathoth was being a bit hard on himself and blamed the fact that he perceived a difference with the fancy cord on having a failing memory, failing perception, or (my extension) failing intelligence. I see this sentiment quite a bit, in particular in "subjective vs objective discussions" and I find it concerning.