The expression pass muster has nothing to do with hot dogs or picnics.
It comes from the military and means "to pass inspection." If you join the military, you muster in and when you leave, you muster out. A muster also refers to lining up for a formal military inspection, the goal of which is to pass muster. In the civilian world, if you pass muster, you meet a required standard.
Pass muster is often used in the negative for things that just don't measure up. Here are a couple of sentences from the news that use pass muster correctly:
Being a profitable, sustaining business was not enough to pass muster. (New York Times)
He was skeptical that any plan to install windows would pass muster with the city's Department of Cultural Affairs. (The Guardian)
Pass mustard is an eggcorn, an incorrect word or phrase that results when people mishear the correct phrase. You can certainly pass mustard to whomever you like — especially if you're at a backyard barbeque — but if you're talking about making the grade or meeting a standard, then keep that yellow condiment out of it! Instead, use the phrase pass muster.