Honestly I think growing up in a rigid catholic school environment is what moved me to become as anti-authority as I am today. In high school, I was finally free to be myself! I cut my hair, dyed it blue, wore the most extreme clothing I could... but I wasn't ever really "lawless" - I just preferred to set my own rules that were dictated by what I believed to be human fundamentals of living peacefully in society.
Kids definitely need rules, but more for structure than "don't do that because I say so" reasons. It's kind of like creativity - if you have limitations, then your creativity is enhanced because you spend less time being lost in ether of everything.
All that said, I think you're right in that it did have a negative effect on my self-esteem. Confidence is something I struggle with on a daily basis, despite knowing that I am good and I am talented... for whatever reason I need all that validated by external sources, and I still don't totally know where that came from.
That was a ramble-y comment, sorry. haha! Lots to think about with this post...