If I am not mistaken, Zhuangzi is the first to refer to a "Lao Dan" (Lao Tzu; Laozi). (And a "Lieh Tzu", for that matter.) How do we know that any such person existed? Why do we believe that "Old Long-Ears", the literal meaning of this name, was not just another creation of the fertile and playful mind of Zhuangzi, like "Uncle Dim Nobody" and "Horsehead Humpback"? That he is traditionally thought to be the author of the Daodejing and is even quoted as such in later contributions to the Zhuangzi is poor evidence, given the propensity of human beings to seize upon personalities as exemplars of what we want to be, but cannot.
More to the point, why does it matter one way or the other whether there ever was a Lao Tzu, or for that matter, a Zhuangzi? It does, only if we require a belief in something outside ourselves.
I am of the opinion that Zhuangzi was unacquainted with the Daodejing and thus, even if he referred to Lao Tzu as an historical figure, he did not view him as the ‘father’ of the tradition of which he was himself becoming a part. He was just another "sage". Indeed, the passage to which this post is a further comment, the one in which Lao Tzu is taken to task for having failed to birth disciples unfixed to doctrine and personality (his own), arrays him along side such luminaries as Confucius — respected, but also demythologized.
Had Zhuangzi known the Daodejing I think he would have quoted or at least alluded to it, as did his disciples. He did so with the Analects of 'Confucius', with the words of his contemporary Mencius, and with the Logicians (Sophists) Hui Shih and Gongsun Long. It seems likely, therefore, that the Daodejing was compiled (from several pre-existent sources, possibly some from the hand of Lao Tzu) immediately after Zhuangzi composed the Inner Chapters (if he did!).
I address this here because it helps illuminate our (my) initial reluctance to understand this passage in Chapter Three as a negative critique of Lao Tzu. We require our saints. Why? Well, for one reason, if Zhuangzi, for instance, was only theorizing about spiritual liberation and had not actually realized it, then his blabberings are hardly any more authoritative than my own. God forbid! If it wasn’t true for him, how could it possibly become true for me?
The answer (there must be an answer!) can be found in Zhuangzi himself. His philosophy might be likened to a universal solvent; it ever-dissolves our present fixation. When did he ever promise a final and true state of arrival? One never arrives anywhere. Free and unfettered wandering is stumbling and bumbling along, making a mess of things as usual, but with a smile on our face.
You can check out Scott's writings on Zhuangzi here.