I might be wrong but I grew up OOT and I nor any of my friends ever felt that way. I think it is a Brooklyn-type school setting that had that problem. Even in my sons school in 5t, the principal regularly speaks to the kids (and parents) about how we must treat everybody, especially the secular teachers, janitors, kitchen staff, etc. with upmost respect and has very little tolerance for kids who don't. Kids are taught that they should say good morning, thank you, etc. to everybody, even passing people on the street.
In regards to that we are chosen, higher, or whatever term you want to use, we (me, my siblings, classmates) were always taught that it means that we are held to higher standards. While 'others' might use vulgar speech, dress inappropriately, be disrespectful and so on, since we are Yidden, we don't do those stuff, speak that way, etc. It is in no way to put other people down, just to reinforce that more is expected from us.