Getting a stupid ribbon in third grade is not going to radically inform your approach to life.
In response to your question, about the stupid ribbon, it probably won't but that's the point. Everyone got a freaking ribbon, everyone got a ribbon in third grade, and fourth grade, and so when someone is actually exceptional how do you then distinguish them, you can't. It's not that the ribbon changed anything because you got it, it's because everyone got it that made it worthless.
Suddenly everyone can prove to everyone how smart they are, meanwhile those that are actually exceptional in an area without an easily defined winners and loser bracket can never be recognized. This leads quickly to a situation where my ignorance is as good as your facts because we are all can be "right in our own way."
The result leads to a distortion of facts a society that can agree on basic reality and everything being run by conmen and manipulators because they realized early on that was the only way to get ahead. Starting to sound familiar?
It's not a single stupid ribbon. It's growing up in a society where literally every competition results in everyone winning. Predicting performance (i.e. evaluating merit) is a skill that requires development, yet when you reward everyone equally regardless of success or failure you train that skill on noise. How do you expect children to learn to recognize when people are or are not skilled when you imply that skills don't matter because everyone wins anyway? Instead you raise them to believe that skills don't matter.
What happens when these children become adults after a lifetime of being taught that everyone is a winner, regardless of performance? Cognitive dissonance and a sense of entitlement, because there will always be true winners and losers in a world of scarce resources.
Children need to experience failure. Just like they need to experience pain and a multitude of other negative emotions that our modern society increasingly attempts to shield them from. Otherwise you raise a generation of childminded adults who fail to differentiate between charisma and merit, and all of society suffers.
But drawing a line from your pet peeve about the world to one occasional event out of thousands in a kid's life is disproportionate and reductive.
Children fail and children fail to get their way all the time, in hundreds of daily struggles. A few school contests they don't even necessarily find important shouldn't be assumed to move the needle. If a kid grows up rich, that's something that colors their every experience and is more likely to shape a lifelong attitude about what they're entitled to. But that still doesn't mean you have to stereotype them.