I’m actually skeptical that the culture of self-esteem and participation trophies and “everyone is a winner” is a significant problem (although it’s not constructive). Kids are smart enough to figure out how things really are. I think one of the major problems in our culture is that we don’t talk about how to deal with failure enough, because clearly only losers have to deal with failure.
If failure were normalized (and it should be, because only one person can win per competition, after all!) I think that would be a step in teaching kids coping skills.