I know a middle-aged man who was mostly raised by his grandmother, a lady who believed she had his best interests at heart. At least I think she did the best she could.
Since he was a handsome and intelligent child she used to feed him such crap as that everything in life should be given to him. That he probably wouldn't even have to work because some beautiful woman would scoop him up and support him. And the weird thing is that he made that the story of his life. He believed it.
But somehow her efforts to build his self-esteem backfired. The story she told him didn't follow the script. He ended up marrying an average middle class woman, having children, and working for a while. But then his life took a dive. He became a drug addict and spent a large part of his thirties and forties locked up.
Today he's in and out of jail. Sleeping on couches. Panhandling or doing odd jobs. And I think it was all because he was pumped full of this idea of his wonderful self-worth.
I believe we should reward our children for thier accomplishments and successes. And when they fall down, don't lie to them and tell them they did well. Let them know when they failed - and let them know they can do better.
But they can only do that by living in the real world. Not an artificial world based on wishful thinking by parents who boost a child's ego and cripple him or her for life.