> whereas truly happy people have expectations that match their reality

By your hypothesis people who are poor, at the bottom of society, and told that they have no chance in life are the most happy ones.

Additionally, it imples that a great way to make people happy is to brainwash them all the time that they have no chance in life, and additionally suppress them so that their expectations match their reality.

This whole idea feels deeply wrong and dystopian to me.

Poor people have no expectations?

Yes, it feels wrong and dystopian but I think there is a hint of truth there? We're all happier when we're brainwashed by mindless feeds on our phones. Then, once we snap out of it, we're supremely unhappy when we realize that what's in our feeds is not our reality.