I work on the team with OP. It's worth noting that in our actual retros we always discuss things causing friction & drag. All of the congratulatory stuff is done out-of-band in an email sent out after retro.

To your other point: are we celebrating mediocrity? I don't think so. While the things we call out may not fit your definition of "extraordinary", when the main discussion points are around how you can improve, it is important to celebrate wins, even small ones, to see how you have improved.