Packers were better prepared with a better gameplan. At one point Collinsworth said LaFleur called the perfect play (against the called D) 3 times in a row. LaFleur said in his halftime interview that everything was working for them. The D got a little better in the second half. The O got worse without Olu and then Geno...but was outplayed and out-schemed from the beginning. There were some plays that can be attributed to poor personal performance (Riq seemed to be out of position all night) but, in general, it seemed like this game was decided in the tape room and on the practice field last week.
That's how I interpret "We didn't play how we're capable." It wasn't an individual effort or individual performance problem. Packers were just prepared for everything that happened from the first play. Seahawks were surprised and had to react in 3-5 seconds. In addition to all that, they're a better team right now.