As I understand it, the book flagamuffin referred to claims that building 'fake' self-esteem instead of encouraging real achievement has led to the slide in education. (I haven't read it yet). As you say, kids see the so-called recognition as worthless. I think the whole issue of self-esteem is more complicated. Many people need positive reinforcement, recognition, and encouragement to have enough confidence to take big leaps. Others have a natural curiosity that propels them. I prefer to err on the side of positive, sincere encouragement and feedback. I always think of the story my brother tells. My mother is of the school of endless praise. She's a child and family psychologist and has always been positive and encouraging. My older brother realized this and increasingly distrusted anything she said. He won a Genie (Canadian Oscars) for best original screenplay for the first movie he ever wrote. He took the Genie home and put it on the table in front of my mother and said, "This is feedback." "Feedback" That story stuck with me, because ultimately praise and encouragement isn't enough - but it might have helped give him the confidence to do what he needed to do. Shoutout thenewgreen Meatballs story.
The little bit I know of good parenting advice, on the topic of encouragement, is to praise achievement when it is actually achieved, and praise effort when it isn't. Then success is good, but a good, honest effort is also good! Which sounds ideal to me. Bias warning here, I was a 'gifted' kid and growing up was only ever told 'Oh you're so smart/kind/wise/etc' and I struggle with a lot of mental health issues, I think in large part due to that. You can't build kids up to be the next Messiah, because when they realize they can't save the world, it hurts. A lot. In a lot of different ways.