Just to put in my two cents worth-
Despite the very well written article and study describing how people who are incompetent think over-highly of themselves, I do not feel the sample or the corollary is entirely valid. Though I do not have access to scientific data, I can point to a number of individuals that are both egotistical as all hell and are also (unfortunately) very talented. Take Eminem, for example, who is quite competent and possesses an ego that would put most gamers to shame. Or take Jack Kerouac who sold most of his stuff by bragging his ass off.
Also, the very nature of competition breeds egoism. Certain personalities react to stress by puffing up their own self-worth (which may or may not be justified).
Within the realm of this competition, I feel, there are a wide range of people with varying motivations. You've got you're lottery players who enjoy the fantasy of winning, you've got the "aww shucks- what the hell, but I don't expect to win" crowd. But you've also got the people who put together some SERIOUS submissions.
Me, I found out at the last minute (3 days prior to deadline) and it ruined my week. I spent the good portion of those three days refining my submission and making it shine as much as possible (Drawing on friends and editors with experience in various related fields for criticism). All for a single submission.
Now, you've got others. Like those who put together teams for their submissions or those who pumped out submissions en mass (I know one guy who sent in 37). And you've got the likelihood that professionals (fantasy-fiction and high profile game designers) put their two cents worth in.
I think how great a person thinks there stuff is (with regards to writing) is directly proportional to how much effort they put into it. Then the self- the ego- has a stake in all this work being of high quality. Even those who may seem uncertain and humble on the surface, IMHO, think their stuff is the 'bomb'. Otherwise they wouldn't continue to work on it and love it as much as they do. And eventually, those who do make it are not often those with the most talent. Instead they are those with the most love for what they do.
You've gotta have confidence to succeed. And if you don't believe in the value your own stuff, then no-one else will.