Sounds like they didn't pass a high enough filter. It's easy to have a high impression of yourself when you didn't actually compete. I remember having conversations with roommates and people in my classes about how hard so and so works, how you would always find them in their office, how we would get emails from this or that professor in the middle of the night, etc. My guess is that most people don't see how competitive academics can be. Without that visibility, people form inflated (egotistical) attitudes.