I'm American but I live in a post-Communist country, and what I've seen in terms of the generations who have had their ambition destroyed is heart-rending. Yet I feel I'm seeing the same in the U.S. as these newer generations have their ambitions stoked and their work ethic demolished.
Just this morning I went to Disney.com with my 3-year-old and there was a "kite-flying" game. All you had to do was hit the enter key to make the kite do tricks. And the voice over was: "You're amazing!", "You're very good at kite tricks." and "I've never seen such incredible tricks." She was hitting the enter key randomly.
And I thought, "This is so American," and I turned it off. I want her to know that she is talented, but that if she wants to be good at anything she'll have to work her ass off. The cure for the low-self-esteem disease is not mindless, superfluous praise; it's recognizing each step in the journey and encouraging the next one.