I think you might be exaggerating just a little bit to justify to yourself that others aren't necessarily better dancers than you, and rather just more confident and/or specifically more comfortable with club dancing. But maybe, as you've suggested, any sort of dancing "skill" is negligible compared to the confidence/comfortability factor (although I'd argue that if two individuals were equally confident and comfortable with club dancing, one could still be noticeably a better dancer, and I'd argue that individuals who can dance in their own homes with no observers can still be good dancers, just might not be good at executing that skill in certain environments).
Like music, visual art, or literary art, dance has the potential to be a interesting form of self-expression. In the quote I mentioned (above) you are defining "good" dancing as effective self-expression and graceful movement. I have no beef with this, but when I talk about dancing, I talk about it in only the way the vast majority of people see it. This fluctuates over time and by culture, but even by otherwise artistic people, dance is seldom seen as anything other than superficial.
I, the people I associate with, and my culture as a whole, wrongfully attach very little value to dancing as an potential art form. My comment was an insult on my culture's general understanding of dancing. The error is not in the art, but in the artificers.
However, there is VERY little art behind dance music. The set of rules music must follow to be "dance-able" is too restrictive and too non-negotiable. Though the music side of dance is very limited artistically, it only serves as a tool to the act of dance itself, and thus is not a restriction. Though woodwork can be a great art, the simple bench a pianist sits on does not limit the artistic potential of his music. I guess one of the reasons dance is difficult for me to appreciate is because, as a musician, when I am at the dance scene, the repulsively shallow music is the first thing I notice and tends to be what I associate dance with most.