Charles is considered a genius because he has never sold any of his paintings.

Charles is obsessed with painting.  Although he leads a normal life at first, when he gets the art bug it consumes him.  All he cares about is his art, but it is not about fame or fortune.              In fact, his last words tell his wife to destroy his work, and he never sold a painting when he was alive.

"No; he has no success. I don't think he's ever sold a picture. When you speak to men about him they only laugh. But I know he's a great artist. After all, they laughed at Manet. Corot never sold a picture….” (Ch. 19)

The fact that he does not sell his work, but is utterly devoted to it, convinces Dirk that he must be a genius.  Since his art has never seen the light of day or been examined by critics, and there is no price put on it because it has never been sold, there is nothing to contradict the idea that he is a genius.

Dirk thinks that Charles does great work, and perhaps as a painter himself he should know.  Charles refuses to sell any of it.  He would rather starve.