I think you're quite correct in terming it as a psychological phenomenon too.
I played Ultima Online, when it first came out. It was arguably the first major MMO. I absolutely loved the game and played it for years. Every once in a while, another MMO would come out that would grab my interest, but it would quickly be dismissed as inferior to UO. In actuality, the graphics and the gameplay of the following games would be markedly better than UO, but my nostalgic view of the game would make it seem like those other ones paled in comparisons. For a long time, I was embracing things about the game that could even be considered flaws, and using them as reasons why it was a better game. (The ability to attack anyone outside of town and steal their belongings off their corpses, for example.)
So, I agree, that it could exist to some extent. I think it's more to do with nostalgia than anything else.
I played Ultima Online, when it first came out. It was arguably the first major MMO. I absolutely loved the game and played it for years. Every once in a while, another MMO would come out that would grab my interest, but it would quickly be dismissed as inferior to UO. In actuality, the graphics and the gameplay of the following games would be markedly better than UO, but my nostalgic view of the game would make it seem like those other ones paled in comparisons. For a long time, I was embracing things about the game that could even be considered flaws, and using them as reasons why it was a better game. (The ability to attack anyone outside of town and steal their belongings off their corpses, for example.)
So, I agree, that it could exist to some extent. I think it's more to do with nostalgia than anything else.