I think the most egregious thing about the original presentation is that it leads you to believe that people with a given skill level all self-assessed similarl

I think the most egregious thing about the original presentation is that it leads you to believe that people with a given skill level all self-assessed similarly. If you plotted the scores and self-assessments of each individual you would see that it's not "everyone [in the first quartile] thought [they were about average]", it's that their self-assessments varied wildly, from low and accurate to high and inaccurate.