I could see having that perception if you were coming from a large company that never fires anyone.

I can say that for some people, it is absolutely scary, even if you are competent and capable. For example: - You suffer from imposter syndrome. Not that uncommon. - The companies you work for have fired people regularly (read: startups). You notice these people are not always incompetent, but more often bad at politics or unlucky. - You have others to support where the risk of being fired just isn't worth it.

Or, put it another way. Incoming netflix hires already have this expectation, so you'd expect the incompetent to self-select, as you've suggested. Yet netflix is reportably still firing often, which suggests one of the following is happening: 1) people who are so incompetent that they don't know they are incompetent are getting through netflix's hiring process 2) something else is happening and incoming netflix hires should absolutely be worried about being fired.