cory, am guessing a bit what you mean by 'really awful parents' but if I assume you mean the 'don't give a crap types' then this fits with what I've read in the book I mentioned.
Part of me thinks that the rise in numbers of sufferers, whilst partly attributable to better and more available diagnostic testing along with better awareness (amongst other things) is in some way associated with the back lash to pre and early post war parenting. it is our generation of parenting (our parents and then us as parents) that has started to shift from the 'seen and not heard' disciplinarian model. However, the upshot has been perhaps a generation of children less aware of their flaws and less able to handle their own mistakes and failings. The title of the book I mention (The Pampered Child Syndrome) speaks for itself.
I hope that in the next few generations we see a shift back to some kind of middle ground between permissive and celebratory parenting and the old boundaried and rigid style of parenting in, say, the 1940s and 50s.
I don't think we have it right yet. I see many well educated, insightful parents creating problems with their parenting in their sheer earnest and determination to make their children feel loved and valued and successful.
This is why I come back to the self esteem thing. Self esteem isn't just about praise and being and loved - it is about self acceptance and self criticism within an environment of safety and love. To have self esteem is to accept oneself warts and all, with realism and confidence. This enables us to accept the warts and all world of disappointment and fortune, morality and immorality, etc. and deal with it wisely and happily.
Taking children to every activity under the sun, hothousing their academic potential, and loving them without boundary does not teach them about the flip side of positive experience and does not teach them to handle fucking up. It does not give them self esteem.