When Funakoshi was alive he always emphasised that karate was not about the will to win, it was the unity of both yourself and your opponent so that there was no opponent and there was no "I". Do you think that the ego is the biggest opponent and possibly the biggest stumbling block for the progression of your martial arts knowledge?
Of course. Ego is what makes us think we know it all, unable to accept the fact that we may be wrong sometimes and open to question. It is worse in seniors - Instructors who believe they have all the answers - Funakoshi never had that attitude and would train under or with people who were superior to him, on a par with him or even "junior" to him. It's egos that make black belts with 3 years of training create their own association / style and stop their training to focus on making £££ / appearing in magazines.
That said, a little bit of confidence can be immensely beneficial to MA training; it can be difficult to draw the line before becoming overconfident.
No matter how far along the path you go you should always remain humble. Funakoshi was a great example of this, once you transcend the techniques of a martial art jutsu to do "the way" you will begin to see that there is is much more in the principals of the art than in the individual techniques. You will then begin to appreciate the similarities of each art, rather than caught up in what art is better or what technique is better.
I would go with what shaolin dragon said, that their is a place for the ego its just a case of keeping it under control. Sun tzu said Know yourself, know your enemy blah, blah blah. If you had no ego how could you know yourself and how could you see your weaknesses and your strengths.