According to Mentalhelp.net Children with an overly inflated self-esteem based on a sense of narcissistic entitlement rather than on genuine accomplishment also face difficulties.
Such children may complacently view themselves as more perfect and more deserving of access to resources than other children with the result that they come across as arrogant and are ultimately isolated and avoided by peers. They may dismiss and thus fail to benefit from constructive social criticism which other children would use to their benefit so as to identify areas for productive growth or change. They may exhibit "externalization", which is to say that they assume incorrectly that all problems they experience are caused by the failings of other people, and that they have no responsibility to change.
Sometimes children with inflated self-esteem will resort to bullying others because they believe they should be allowed to judge others, and to treat them however they wish.
Children who do not grow out of this immature, entitled pattern will often go on to have less success than their genuinely high self-esteem counterparts, at least with regard to their ability to form lasting and emotionally satisfying intimate relationships.