The first sentence is grammatically correct but it sounds a little awkward. If a second person (the brother) is to be introduced, the word "he" has to be emphasized:
"As good as HE is at playing the guitar, his brother is even better."
That sounds unnatural. Usually the focus is elsewhere:
"As good as he IS at playing the guitar, he used to be (or he could be) better."
"As good as he is at PLAYING the guitar, he can't tune it."
"As good as he is at playing the GUITAR he's even better on piano."
Your second sentence - "As good as he is at playing the guitar, his brother is bad" - isn't idiomatic. It needs to end with a comparative, such as 'better'. (Or, alternatively, "As bad as he is...his brother is worse.") It would then be similar to your first sentence, and my comments above would apply.
It's unusual to introduce a second person into this construction. We would probably say, "While/Whilst/Although he is good at playing the guitar, his brother is even better" or "...his brother is bad/awful/Lil Wayne."