Why is egocentrism bad? Let's say that there is a person. This person has a lot of good thoughts about themselves. Suppose this person never revealed these thoughts to anyone, such as "I'm better than you" in any manner of sort. But this person also happened to contribute to general society in some form.

Would it be a contradiction, then, to say this person is awful and immoral? Generally, narcissism is looked down upon, but here it seems to hold an evolutionary advantage.
It seems like a few distinctions are relevant here. First there is a distinction between morality and evolutionary adaptiveness. Overt displays of arrogance are often considered a character flaw and immoral. Whether being arrogant is beneficial from an evolutionary perspective is a very different question. Thus, it would not be a contradiction to say that something is both immoral and adaptive. At least it would not be a contradiction unless your morality was synonymous with whatever is evolutionarily adaptive. Similarly it is possible for someone to be immoral in some aspects of their life yet be functioning quite well and contributing something useful to society.

Second, there are a range of constructs that you are touching on including, self-esteem, arrogance, narcissism, and ego-cenrtricism. Self-esteem is generally seen as both a morally good thing and as an adaptive thing. Self-esteem is assumed to protect you from life's set backs and is often associated with more positive life behaviours. However, arrogance is different to self-esteem because arrogance is generally predicated on feeling that you are superior than someone else. Furthermore, I think that with arrogance and narcissism the assessment often extends to a deeper level, that not only does the person think they are more competent than someone else, but that they might even be a "better person" on some level.
Narcissism is often thought of as an unstable sense of superiority that can be threatened by others which in turn can lead to abusive behaviours by the narcissist. Ego-centricism is also complex in that it relates to a pre-occupation with one's own self with the concept grounded a lot in developmental processes from childhood, to adolescence, and then to adult hood of forming a better appreciation of private and public, and building a better representation of the external world.

In general scientific psychology does not directly concern itself with the morality of behaviour. You could apply moral principles to judge behaviour, but this would largely be a process of philosophical reasoning. By most moralities, treating others as less human than oneself would  be considered immoral. But more generally moralities differ in whether beliefs that never manifest in action are subject to moral judgement.

That said, scientific psychology is concerned with adaptiveness. So for example, ample research supports the idea that higher self-esteem is associated with greater adaptiveness. Similarly much evolutionary psychology speaks to the balancing of self-interest with effective social functioning. Thus, it make sense that a degree of self-interest may be adaptive, but when it gets to the narcissistic end of the spectrum, I would assume that this would be more inclined to interfere with effective social and life functioning. If anything, the need to feel superior to others may even imply a sense of inferiority.