To you, it seems the best way to achieve self-improvement is to maximize your value to others, i.e. by moving up the social hierarchy. But that doesn't imply that those who don't play the game have no worth, does it?
I think you are conflating a sense of happiness with a sense of worth. They are not necessarily the same.
For example I occasionally find myself in conflict with an acquaintance over a miscommunication. If after explaining the underlying conditions the other individual refuses to adjust their perception of me, I couldn't care less. That's their problem, not mine, even if they continue to spread their (possibly vile) misperceptions.
Now if I had sucked up to them perhaps, yes, I would have improved my life. But what I did not do was reduce my self-worth.
The reason I assume what the psychologist meant is that most of them are neurotypical, and neurotypical people are deeply invested in social primate dynamics. I understand that this is hard for neurotypical people to see, but you might read things like DeWaal's "Chimpanzee Politics" or Johnson's "Impro" [1]. Plus there's my personal experience, where psychologists are very inclined to talk about self-worth in the social sense. And I think that's fine; I'm sure it works well for their neurotypical patients.
[1] particularly the section on status transactions, which are vital for authentic theater performances, but are rarely articulated because it's so natural to neurotypical people
While some types of non neurotypical people don't automatically spend their mental energy on such thoughts and analysis. That is maybe why 'self worth' feels a strange term to them. They simply are who they are and will not try to come across as this or that type of person (helping, smart, empathetic, strong character etc) . Neurotypical people hence find the way they come across weird.
As long as I'm mentioning things that helped, I'll recommend this online alexithymia test: https://www.alexithymia.us/test-alexithymia
It looks at ability to perceive one's own feelings. Once I realized that I was relatively bad at it, it was such a relief. And in the years since I've gotten a lot better, because I knew I needed to work harder at it than the average person.
[1] If that rings a bell for anybody, I'd love to know!
One is what I think of as the neurotypical way. They spend a lot of energy on social modeling, on fitting people into hierarchies of privilege. (E.g., "respecting your elders", older sibling vs younger, teachers vs students, the popular kids, and so many other things.) Then in the same way they're judging the worth of others, they fit themselves into the same primate status model.
I think that's what the psychologist is talking about. Personally, I find that way not super useful.
But another way is sort of reverse engineering. From how person X treats themself, what can we learn about how much they value their own self? Like you, I didn't have much of a concept of self-worth in the sense of "where do I place myself in the many hierarchies most people around me are constantly aware of." But a therapist eventually got me to see that I did not treat myself as worth the same as the people around me. Paying attention to that has improved my life a lot.
The big question for me is to what extent the latter thing is influenced by the former. For neurotypical people I gather the link is pretty strong. For me it's definitely a weaker link, but it's hard to tell the difference between "there is no link" and "I don't notice the link".