If the capital were further South, the Confederate high command would have had more options. They could have lured the Union Army south and bedeviled it with guerrilla attacks, cutting off federal supply lines, until they could crush their foe. But Virginians wouldn’t have fought so doggedly if they thought their state was expendable, so the capital was in Richmond, and the war was about defending Richmond, and Lee was locked into situation that made victory very difficult.
Lee’s reputation has a lot to do with his masterful victory at Chancellorsville. Some of the Union generals he faced were incompetent, like Burnside at Fredricksburg. When Lee invaded the North at Antietam and Gettysburg, he didn’t succeed. He did save Richmond in the masterful Seven Days’ Battles, but also incurred higher losses than McClellan.
The contrast between Lee the master tactician and Grant the bloody brute force butcher isn’t fair or accurate. If you wanted to advance in the kind of war that the Civil War generals fought, you attacked and took higher losses than your opponent. Lee and Grant weren't as different in that respect as the myth says.
I have never criticized Grant. Nor Sherman. Both were very good at using the assets they possessed, assets that greatly outnumbered anything the Confederacy had.
Since the Confederacy did not have anything close to the assets enjoyed by the North, Lee had to fight a different kind of war, and his strategic improvisations were the result of that imbalance.