I think there is a third type, the type I am.
Your first type is the ego-inflamed clueless delusional. They're not malicious, they just have no objectivity or ability to compare their stuff to the work of professionals and see the differences. They're blinded by ego.
Your second type probably includes far, far more really talented people, but the "everything I do sucks" mentality sounds like a curse that is just as bad, I'd say. Unless the writer can get over it.
MY confidence problem is something else. I have great confidence in my ability to come up with the seed ideas... cool premises loaded with potential... I'm excellent at this part. But then as I start working on fleshing out the story, because it's such an isolated and lonely process my mind starts sort of turning into an echo chamber, and the lack of other ideas and voices makes the thing start collapsing in on itself in a loss of conviction in the premise when it doesn't have to or deserve to. This happens to me EVERY TIME.
Thus I've come to believe that, as much as I hate to admit it, I really, REALLY, need a writing partner for the story development stage (not the writing of pages---I'm quite confident in my talent at that once I have a solid outline and story in place). There was a time when my ego foolishly insisted that I come up with everything myself, but at this point I'd be ecstatic to share the "story by" credit with someone who could work with me and help prevent this syndrome from blocking my process.