Agree with the first half, not the second. Narcissism isn't caused solely by having a good upbringing. Conversely, these people could have been children who have grown up being told over and over again how stupid they are, and have now become ultra defensive against anyone who challenges their view of the world, and more determined to prove that they are right, so the rest of the world can deliver their "apology" to them for treating them so badly.

Frankly, I think today's generation is getting a lot more criticism than praise these days. People have insane expectations that their children should be perfect, so they hear constant lectures about how stupid and untalented and spoiled they are if they aren't the best at everything. The parents treating them like kings and queens often comes with a price: children are expected to pay them back with perfect grades, perfect jobs, perfect social lives, perfect everything, and when the kids don't achieve those things, they feel like total failures because even when mom and dad give them everything they could possibly ever need, they still can't have effortlessly happy life their parents think they should have.

It's not just the parents either: the USA in general promotes this myth that it's a tough world and you can only succeed if you are smart enough, accomplished enough, and talented enough, and everyone feels like they are failing because they don't feel as confident, as self-sufficient, or as accomplished as other people appear to be. They feel like they are in constant competition with the rest of the world for everything, so they have limited sympathy for the rest of the world. It's not that they want to prove that they are smart and everyone else is an idiot: they "need" to, because that way they can prove to others that they are worthy enough as a human being. Worse than that is if they can't prove their worth, then all those people who bullied them and called them dumb will be right: they really are that stupid and deserving of criticism and ridicule.

TL;DR: Constant criticism can lead to overcompensating egos.