You are correct. This is basically a fixed phrase, but I think it is somewhat logical anyway.
In my mind, the emphasis is on “person” (not that you would stress that word when saying this).
. . . he had not [. . .] been able to see her for the person she was.
The word “person” is meant as a total encapsulation of identity; someone fully formed, no longer a façade or vaguely perceived stranger.
“See [subj] for [quality]” is a common construction, but it uses a sense of “for” that really only survives in various fixed phrasings (where it basically means “as”). The most common of these is “taken for granted” which means that something is treated (or perceived) as if it were granted (or already a given).