My kids are in their early thirties now and grew up right in the middle of the "self-esteem" boom. We jokingly called the grade school they attended "self-esteem central" and this was back in the late 80s, so we (as parents) were very aware of what was happening at the time.
I think we knew even then that not everything about it felt quite right. My feeling around the absurdity of the 35 trophies for "trying real hard" at the time was that it diminished the very real accomplishment that actually winning something (for real) entailed. AND, the kids were never fooled. They knew exactly who had really won (as others in the thread have mentioned). So like all of these "reactionary" movements (as defined by a sharp deviation from what came before) they tend to pull too far in the other direction.
Most important for me though is the feeling that the movement had the basic idea perfectly right! I think it is hard for non-parents to understand the feeling of helplessness that a parent feels when they send their kids into the mad hopper of public school. You have raised and loved this little being for 5 or so years and now you are sending them to a place where you can mostly only hope that they will not be treated poorly (berated, insulted, hurt physically). So if the self-esteem movement did anything, maybe it raised the bar for the reasonable treatment of kids as fallible human beings that respond better to the carrot than the stick? I think it feels right to me. As parents we are just looking for a safe place for our children to learn stuff. Is it so much to ask that this place actually not suck?
As far as raising children with an eye towards "global competition," the argument can be made that there are diabolical ways involving mind-games, insults and cajoling that will breed more cutthroat competitors and that the adults raised this way are better equipped for the "real world". I say have at it. Parents can make that choice too if they want to. But I didn't want that for my kids, period. Make the "real world" the place you want it to be.