It appears that all acquired mental illness stems from low self worth.
I prefer to reserve the term "mental illness" for the major psychoses and for things like OCD and major depression which I expect have neurophysiological origins.
Life dissatisfaction and unhappiness are something else. I'm not convinced that an "illness" analogy is entirely apt.
Environmental forces that shape a person's mental processes result in low self worth in early childhood.
Yes, I think that often happens and is very common.
If there is truth in this the Buddha would have shared it with us, but where in Theravada Buddhist tradition does he explain this concept?
He did, didn't he? Isn't that what his teaching about dukkha, the arising of dukkha, the subsiding of dukkha and the path to the subsiding of dukkha is all about?
It's just that his approach to the problem of dukkha (suffering, dissatisfaction) is very different than that of the contemporary world.
His solution for the problem that you call low self esteem isn't to artificially blow up one's sense of self like an overinflated balloon. It's to lose one's emotional dependence on a sense of self in the first place.