You tell a kid they're smart: You've immediately set them up for long term failure. "Smart" is a quantifiable hard limit. The problem with smart people is that as soon as they run up against a challenge/concept/issue they cannot immediately overcome, they get frustrated, because they "should be smarter than this!" Which often results in avoidable frustration/anxiety/depression. You see this a lot. "Gifted" "smart" ki…
But the problem here wasn't that I thought I was gifted, it was that I didn't compare myself to my peers at all. Getting an A was easy, so it meant nothing to me. The other students who did well were not people I aspired to be like. I spent all my time working on things I enjoyed for myself, and those challenged me to work independently. I failed Algebra because I spent the whole semester reading a statistics book. I failed an English class because I spent the whole time programming on my calculator. (I had run out of classes to fail, and had to take classes at college to make up the credits.) But once I started studying physics, math, and computers, I've been happily over-performing ever since.
I remember moments where I turned away from challenges, but I always turned toward something that mattered more to me. And there are challenges there, too. You will be challenged no matter what you choose to do, so long as you aren't doing only what has already been done.
So I can't say I'd agree with you. People are often just awful at measuring success.