If Sheppard improves--which he should, the Defense could be elite.
Our DB's are good enough, and will only get better with the improved D line play.
The big question is the Linebacker play. Sheppard should only get better, Barnett and Morrison provide solid experiences and depth, Merriman is a wild card--X Factor, Scott is an under-rated asset, and I strongly suspect the BIlls may draft a LB in the 10 spot or sign a capable Free Agent to add depth.
The only disappointment has been that the younger guys Nix drafted (Moats, Batton, White, etc) have not really panned out--but maybe with another year and a better line, just maybe, we'll see real improvement this year. Anyhow, if the LBs improves, yes, it could be an elite defense, in my opinion!