Jack has noticed something, for some reason he is comparing the person he sees in the mirror to the person standing in front of him. Grady in contrast no longer has a live person (his name was Charles) in that mirror standing there with the real Jack, which means if we were to look inside that mirror, there would be no Grady.  Or there is a decrepit ghoul, like the hag. A corpse named Charles, the unseen-offscreen conjuring of Ullman's story, the place where Jack is still trapped running from the hag.

GRADY "That's right, sir."