IMHO opinion Data was insulting Picard. The movie reveals that the Borg Queen had been present on the cube which had assimilated Picard in"The Best of Both Worlds" and had survived somehow.
In the final scene in Enterprise Engineering:
PICARD: Let him go. He's not the one you want.
BORG QUEEN: Are you offering yourself to us?
PICARD: Offering myself? ...That's it. I remember now. It wasn't enough that you assimilate me. I had to give myself freely to the Borg, ...to you.
BORG QUEEN: You flatter yourself. I've overseen the assimilation of countless millions. You were no different.
PICARD: You're lying. You wanted more than just another Borg drone. You wanted a human being with a mind of his own, who could bridge the gulf between humanity and the Borg. You wanted a counterpart, but I resisted. I fought you.
BORG QUEEN: You can't begin to imagine the life you denied yourself.
PICARD: It's not too late. Locutus could still be with you, just in the way you wanted. An equal. Let Data go and I will take my place at your side, willingly without any resistance.
BORG QUEEN: Such a noble creature. A quality we sometimes lack. We will add your distinctiveness to our own. Welcome home, ...Locutus. ...Data, you are free to go.
PICARD: Data, go.
DATA: No. I do not wish to go.
BORG QUEEN: As you can see I have already found an equal. Data! Deactivate the self-destruct sequence.
PICARD: Data! No, don't do it. ...Data, listen to me.
COMPUTER VOICE: Autodestruct sequence deactivated.
BORG QUEEN: Now enter the encryption codes and give me computer control.
PICARD: Data! ...Data.
DATA: He will make an excellent drone.
(Picard is taken by two drones)
So this says that 6 years ago in "The Best of Both Worlds" the Borg Queen offered Picard a chance to be more than a Borg drone, to be the equal and partner of the Borg Queen, and Picard refused and was turned into an ordinary drone.
Now the Borg Queen is trying to turn Data into a partner for her, and Data is pretending to agree to it. So the Borg Queen tells Picard he wasted his chance and Data will take the position which Picard once turned down.
So as Data acts to convince the Borg Queen that he is totally on her side, he naturally insults Picard by saying that Picard would make an excellent drone. An excellent mindless cog in the vast Borg Machine, instead of an excellent equal partner to the Borg Queen in command of the trillions of Borg drones.