I think there's an easier explanation for the effect, and that is people are just not very good at judging their skill level, and due to reversion to the mean,

I think there's an easier explanation for the effect, and that is people are just not very good at judging their skill level, and due to reversion to the mean, low-performers probably overestimate and high-performers underestimate. And also, I think there is actually a tiny bit of DK going on. And then, as you say, it gets amplified by the pseudo-literati.