I personally do not have any opinion about what you are calling self denial. You put very different things in the same bucket --- such as being mindful and unreactive (and unreactive might mean different things to different people), and self flagelation (which is a practice to induce ecstasy through pain). As I have no opinion on so many different things at the same time, I find your question hard to answer.
The therapists were encouraging the kids to have a higher regard for themselves, which seems quite logical....until you view it in a spiritual light.
If the kids hurt themselves out of self-dislike, then it is quite logical that they should like themselves better. This is true when I see it, under my own "spiritual light" (e.g. part of my current practice is learning to be my own best friend). As there are many brands of light bulbs, there are also many different spiritual lights. I don't know the particular brand of spiritual light with which you are shining on the matter, but it seems like it's one of the "very illogical®" brand?
I personally try to get a brand of spiritual light that has the highest Rate of Logical Consistency (RLC), Frequency of Practical Applicability (FPA), and Amused Gayety Incidence (AGI) that I can currently afford.

Unfortunately, I have had to pass out on some of the other features, such as the Divine Love Coefficient (DLC), the Index of Hallucinatory Credibility (IHC), the Belief in Reincarnation Factor (BRF), and the Boddhisatva Trip Rating (BTR). I couldn't find a spiritual light with enough RLC and FPA, which also had a high DLC, IHC and BRF. And I wasn't looking for a high BTC anyway, so I managed to squeeze in that little extra AGI.

Maybe you would like to change your particular brand of spiritual light to include other features, and weed out apparent paradoxes? Remember that each new spiritual light is paid, in advance, with hours of contemplative practice.