Psychological health is directly correlated with how nice people are to you. That's why good looking, affluent people have it all, intelligence, stability, and psychological health, above the mean.
Being cruel to someone, even if "only joking", or telling "hard truths" (that actually more reduce to your values, and opinions rather than facts) does people damage.
"Over-sensitivity", and "PC" are just delegitimizing catch phrases, and not actual points, or objections, but names you call someone in order to dismiss their objections of abuse. Names we don't want to be called, when we want to be cool, and liked, and not associated with the frantic, the no fun, the hysteric.
Mean people are the ones that ruin the fun, not the ones unwilling to conceal their hurt, and pretend like everything is fine, while being mocked, or ridiculed, because they're such good sports.
Will also say, that "egotism" is most definitely not the opposite of a lack of self-esteem, as narcissists are definitely not the posture child for self-esteem. The need to self-elevate, to self-promote, self-aggrandize is rooted in a low self esteem, as it is about molding, or effecting perceptions of oneself by others. It is rooted in the feeling that one isn't good enough as one is, and thus has to convince people that you possess all of these amazing attributes in order to feel secure about oneself.