I think you need to look at this from another perspective.
None of us chooses what family we are born into, but most of us are proud of our household. It is because of our shared experiences as a family. We are proud because we know our parents have sacrificed everything to raise good, honest, educated children. We are proud because we see our older siblings succeed due to their hardwork and determination. We are proud because we know our family has stuck by us through thick and thin. We are gratified to be part of such a tight unit.
Many of us do not choose which high school/secondary school we go to, it is usually determined by our parents or which jurisdiction we live in. But many of us proudly wore our school colors and supported our football teams (both types of football!) because they were our own. We wanted to see them succeed because it was like a personal success. Because in one way or another we feel like we've contributed to their accomplishment. We become proud of our schools because we know it builds leaders. We see our seniors attend top tier universities, we see our athletic teams win championships, we see our academic departments winning awards. We want to be a part of that success, and rightfully so.
When we come out from the womb, we are not proud of our heritage, our culture, our nature or our ethnicity. Shoot, most ten year olds don't care either. I don't think nationalism or patriotism is inherent. This loyalty comes from experience. We all have shared experiences. We have eaten at the same fast food restaurants, shopped at the same stores, listened to the same radio stations. We feel a kinship to these places because we own homes here, our business and barkat comes from these cities and coutries. We all love a place that is familiar and warm. Like your favorite restaurant that you take all your out-of-town friends to and proudly say, "let me take you to my spot." You don't own that restaurant, you have no stake in it and yet you feel as though it is a part of you.
Many of us love our country because its pain and sorrows are our own. If you are Iraqi and find out that back home, your neighbor from childhood was a casualty in an enemy raid, you feel longing and pain for your deteriorating country. If you are American and you learn that your college roommate passed away in the twin tower attacks, you may feel the passion and zeal to protect your country.
If we drink a fizzy, green colored, cream cola for much of our childhood we will happily say that Pakola is the best drink in the world. If we played sports with our friends outside everyday and pursued athletics in school we will always say that football is the best sport in the world. If our mothers, sisters and wives have long hair, a tall statue and glowing skin we will all say that Punjabi women are the most beautiful in the world. Maybe loyalty is not inherent, but it is entirely natural and no new phenomenon.
Likewise, if you had bad experiences with your family, your school, your country etc there is a good possibility that you will become a black sheep, a drop out or treasonous. It is our experiences that shape us and to say that this is stupid is ignoring logic.
MashAllah very well said! I agree with what you said.
Ofcourse, there is a difference between being proud and being just downright arrogant about it.