We're not sure if this guy is bravely stupid or stupidly brave, and neither is anyone else in the tale. But one thing is for sure: the brave little tailor has a healthy sense of entitlement. When some flies try to share his jam, he flips out and swats at them until he kills seven. This must be a big deal since he embroiders "Seven with one blow!" on his belt (you should see this dude's Etsy shop).
Both giants and kings don't know what to make of him. Is he really that good of a fighter? Is he bluffing? He sure doesn't think so. When he kills the seven flies he says to himself, "You're quite a man! […] The entire city should know about this!" (The Brave Little Tailor.73).
We also know that he's pretty clever, such as when he tricks a giant into thinking that he's squeezing water from a stone when he actually has a round cheese in his hand. Cleverness and confidence must be a winning combination, because this guy accomplishes a bunch of difficult tasks and ends up married to the king's daughter.
And that's where that ego comes into play. He manages to con, well, everyone into thinking he's worthy of marrying into royalty—including his wife. When she finds out, she tries to get some dudes to off him in his sleep, but he manages to outsmart them, too. Only a guy with a huge ego and a huge brain could pull off this stunt.
So while perhaps he's a little delusional as to his own importance in the world, the brave little tailor does in fact take care of business, and does so in such a way that convinces others of his effectiveness. Clearly he was destined for greater things than sewing stuff onto other stuff, and he's a fun take on the potentially boring hero of most fairy tales. He gets the princess, sure, but that's not really the point—his own awesomeness is.