Well, no... and yes.
What everyone really wants is approval from society. This is not even a negative impulse, put into proper perspective. It is the natural impulse of a social animal, taking it's self-worth from social feedback which creates a strong social unit. It's the basis of culture really, the sharing of seemingly meaningless rituals to encourage unity. So we work the right jobs, wear the right clothes, make the right social gestures, and feel acceptance.
The thing is, this is the instinct of a pack animal, a social unit small enough to make this emotional dependence a positive thing. The modern industrial person is filled with an existential angst, not part of a community, separated from their society. We are no longer a village, we are a machine, so perhaps it's no surprise that we no longer glorify the steadfast community pillar, but instead mythologise the rebel. The one who breaks the order rather than upholds it.
So we now have the culture of "fame", putting all our instincts for social approval into fabricated images, stars playing stars. The modern mythology of the working person is "big loser". It's the performers who are the great ones. They escaped the machine. They sing and dance and act and have a great time and are all rich and beautiful. We work all day and they play.
So that's what everyone wants to be. Not a cog in the wheel. There's no social approval in that anymore. They want to be stars and you can't blame them. It's a perfectly rational progression from their inborn drives. Society is too large and people can't reach each other any more, except through mass media. If you want to get the social approval you are hard-wired to desire, you'll have to get it by getting on that media. You need to become a star.
Now all this was before the internet, which is why I say the internet has not made us more vain. This tendency towards valuing empty vanity over substantive contribution was well entrenched by the internet's time. What the internet did, however, is make a mass medium that was egalitarian. Suddenly everyone could mass communicate, and so , potentially, everyone could be a star. So now the vain hopes of people who see vanity as the only path to satisfaction (social approval) are being indulged more than ever before. The internet is a place without rules or standards where every attention-hungry goof with a computer can jostle for attention to their hearts content. Not surprisingly, it creates very childish behaviour.
So while it hasn't made the world vain, it is certainly encouraging vanity. On the other hand, it is also encouraging creativity. It's a great boost, doing home-made kitchen-sink creative projects, to know that you have a free and easy means of giving it to others. A lot of little films and sites and such would probably never exist if the option of broadcasting them hadn't spurred them on. And, as littered as it is with nonsense and drivel, the internet is even more full of valuable connecting and reaching out. It's clearly a force for good, but perhaps one that takes some getting used to.
The world is in a period of profound upheaval. The whole manner in which our cultures operate are going to be called into question by forces too big to smother, the internet among them. Our social structures, both official and unofficial, are being changed by the interconnectedness the internet provides, and we've got a ways to go before we see the end of that journey. Give people some time to understand how we can create satisfying social structures within these new realities, and I see a new age of closeness, not division. Maturity, not childishness.
The last hundred years were constant expansion. It was all society could do to keep up and many important human considerations were left behind. Now we've reached a point where we have to scale back. A consolidation of and reflection on our power and how we are using it. Once we get over the initial hump of collapse, we will build a much more humane society than the one we've made so far, with a new appreciation for temperance and responsibility.
So no, it's not the internet, and I'm not worried about it.