While no one can question Fernando's heart or desire, he was never talented enough to beat the top guys and he never will be. He had very good punching power, but what separates the very good fighters from the great fighters are speed and reflexes. Fernando, even at a young age, never had the reflexes to avoid being hit with big punches (especially left hooks) and he also didn't have the chin to absorb big punches once they landed.

Very few fighters can absorb the kind of punishment that Vargas took against Trinidad and ever be the same fighter again. Since that fight, Vargas has had three major fights (DLH and the 2 vs. Mosley) and he has lost all 3, 2 of them coming by crushing KOs, both on huge left hooks.
Everytime Vargas fights a top-notch guy, the results will be the same, and they figure to get more lopsided the older he gets. And you can't say "Oh, he beat Winky and Quartey!" because that was a long, long time ago, before Trinidad took his pound of flesh from Vargas.

Luckily for Vargas, he's made a ton of money from his big fights and should be financially secure. He should retire.