These are the words of a young person who was trained to see everyone else's success as an implicit criticism of their own ability and effort. It is not the author's fault. A mentally healthy person, when shown a display of excellence, is impressed, energized, and motivated.
I have never thought that "participation trophies" do any damage to young people. Young people are smart and know that participation trophies are bullshit. What actually hurt young people was the constant reinforcement that "anyone can do anything/anyone can be the best". The corollary of "anyone can be the best" is "if you are not the best, then something is wrong with you/you're not trying hard enough". Not everyone can be the best; many people have genetic and network-based advantages that will guarantee them better results at a skill than 99% of their competitors.
Young people have very little free time. The time they spend actually focused on their responsibilities is constantly overshadowed by fear and anxiety about The Future (grades, college, etc.) The remaining time they have is spent on their phones and computers, which is the only reliable way to make the fear and anxiety turn off for a few minutes. When they do have free time for extracurriculars, they're in sports playing against future D1 athletes and having metrics and social status tracked against them, or in theater getting cast as extras while the good roles go to the handsome kids, or in music listening to the musicians' kids and the international students play like professionals.
If you want to be okay with not being extraordinary, you need a lot of free time to get properly bored, and a social network with which to practice your hobby completely free from the judgement of The System. Practicing to try to beat a rival school headed by a college-bound athlete is stressful, but practicing to try and impress your friends at pickup soccer purely for fun is not.