It's been my experience that WTF taekwondo schools all teach Olympic sparring and almost all teach Tae Geuk forms (with some teaching Palgwe and some very few teaching no forms or forms made up by the instructor or his/her instructor). Then, some teach power breaking moves, some teach fancy jump kick breaking moves, some teach responses to grabs or other self-defense skills. Any self-defense skills taught would vary greatly from dojang to dojang.
ITF schools would teach point-style sparring, ITF forms, one-step sparring responses to high punches, and I don't know what else.
Then, there are unafiliated taekwondo schools that teach some WTF things, some ITF things, and probably some other things.
As far as saying that you can tell how good an instructor is by his students ability in forms, I would disagree. The instructor may choose to focus on forms, or on sparring, or on character development, or on any number of things. So you could tell how good an instructor is by how good his students are at the thing he chooses to focus on, but you still need to ask yourself if you agree that that is the most important thing to focus on.