I think you underestimate just how well national pride works on people. It's an amazing proposition - you get to identify with the struggles and achievements of millions of people over decades just by being born in some spot. This can be useful/motivating in moderation, but it's obvious how dangerously easy it is to abuse by nationalists. Russians rather feel mighty dying in a pointless war than admitting they will never be a superpower. Americans would rather reminisce about the 1950s than doing anything to fix the many ways we've stagnated. Humans are willing to accept a lot of suffering instead of feeling humiliated.
Good point. Meanwhile you can often lead a good life if you're willing to forego status and try to be objective about your accomplishments. Let others believe what fantasies they want. It's always a fantasy anyway.
Everyone is clutching onto narratives and blind-spots.