I think that throughout this thread it's important to remember that the label 'Overrated' isn't a slam at the band per se', but more at the hype that surrounds them, often not even of their doing.
Taking the Grateful Dead as an example, it's not a critique of the wealth of their contribution to music so much as a critique of their following. Although many people have followed the Dead for genuine reasons, there's a lot of people who did it just to be a part of something...sort of like lemmings. Those are the people who tip the scales over to the 'overrated' side.
It's like someone saying "Clapton is God". WHY is Clapton God? Do they even know? Can they justify their statement? Most of the time, no. There's a red flag for overrated status.
REM was a nice little alt rock band out of Athens, Georgia until someone got the idea that Michael Stipe was some sort of visionary. Maybe it was Michael Stipe who got that idea. Regardless, though a wonderful band with great songs, they became overrated. In other words, their hype factor was writing checks that their talent level couldn't cash. It's not totally their fault. Sometimes the hype factor is so large that *no one* can measure up.
There's sort of a bell curve in the quality of output from most artists. They start out small, there's a big rise in talent level and output, then with a rise in popularity, that talent level starts to wane. Eventually, they run out of new material or fresh ideas or whatever it is, usually before the popularity wanes. Most end up back where they started.