Self-esteem works that way from *some* people, but not all people.
I recommend reading theorist Theodor Adorno's book "The Authoritarian Personality." In that book he distinguishes between nationalism and patriotism. He defines nationalism as love/esteem value of one's in-group being dependent on hatred/looking down on an out-group. The Nazi fellow you described, for example ("Germans are great because Jews are bad.") He defines patriotism as love/esteem value of one's in-group without reference to an outside group ("Germans are great because of the works of Goethe, Beethoven...and also the Alps")
I do not get my self-esteem by looking down on other people. I get my self-esteem through my deeds. For example, I'm a great teacher. That gives me self-esteem. My skills as a teacher are reinforced through my positive interactions with my students. I don't need to be a better teacher than other people. I don't even think about other people's teaching in connection to mine. What makes me happy is that I teach well. I know that I teach well through positive feedback. I get self-esteem through the fact that I sing well and play the banjo well. There are a gazillion people who are better than I am. But that doesn't matter to me. I'm not comparing myself to them. I compare myself to myself and to the reactions from my audiences. I'm a people pleaser and a care-taker, so I also get self-esteem by making other people happy.
Because of how I work (through positive interaction and feedback), I make a point to give other people positive reinforcement as much as possible.
I think about this in terms of sports. There are people who have to beat other people to feel like they've accomplished something...but that is not the only way sports work. I have really enjoyed rock climbing, for example. In rock climbing, I don't get value by saying--"yeah! I'm a better rock climber that you!" I don't think about other people. I think about my own challenges and my own successes. If I climb to the top of a hill, I feel great. Or if I climb higher than I did last time, I feel great.
When I'm doing a more competitive sport, like Rapier fighting, I don't get my charge by beating someone, I get my charge from becoming better. If you beat me in a match, but I have learned something? Or I fought really well? I get self-esteem. If I beat you in a bout, but it was really easy and I dominated you? I get no self-esteem. It makes me feel like a bully and makes me feel diminished.
When I played soccer, I'd rather the team lose, but play beautifully and with great teamwork, than win in a non-harmonious way.
So...not everyone works the way your professor has described it. Now, if you are one of those folks who operates in a power over sort of way, it probably is important for you to think that everyone works that way. But not everyone does.
If you work that way....that's cool, do your thing. I recognize that it can be a great motivator for people who work that way when everyone involved is partaking in that process consensually. But being around people who work that way tends to be toxic to me, so I tend to avoid people who operate that way. Not because I think those people are bad or that I'm better than them, but because we are incompatible.
For all I know, many of the sorts of people who operate in the way I do similarly avoid folks who work in the opposite way. So it may be that if you operation on a power over method you rarely see people who don't