I don't think it's self aggrandizing. It points to a need to balance compassion for self and others. If you let that ratio get unbalanced in any direction it leads to bad outcomes.
- It tells people they are inherently better than other people: "Other people aren't as good as you."
- It excuses their bad behavior: "Your bad behavior is not your fault, you just reached your limit in dealing with bad people. It would happen to anyone".
- It offers a false veneer of being reasonable, even when it is just a framework of excuses. As you say: "It points to a need to balance compassion for self and others."
I don't think such ideas are necessarily engineered this way, but that is why they proliferate.