How do you react when you find out that your kids are better at something than you? I can honestly say I was proud when my son whooped my backside in basketball the other day, at least I can brag that I taught him everything he knows.
You must not let him win again at any cost. He will use this as ammunition against you for something in the future. I don't think my children will have a problem beating me at much since I'll be like 60 by the time I have them and they are old enough to do things.
I praise them when they achieve something even those that surpass my achievements. It gives their self-confidence a lot of boost to be ready for competition in the outside world.
It would be great for their psychological growth, so I would be proud of them and encourage them to still be doing better and better though they have surpassed achievements.