Being overrated is subjective tbh as your opinions for who is and isn't doesn't really have much empirical merit, much like anyone else.
However, in my opinion, while I'm still doing my watch-through of RAW in 1996 and 1997, he was easily the third best wrestler and most entertaining star on the show just from his facial expressions and his wrestling ability pre-neck injury. If Owen never accidentally dropped him on his head, chances are he would have gone down as one of the best technical wrestlers of his time.
That said, he was treated very well in those two years as the challenger on the chase for the title. He helped give Bret Hart's heel turn life and helped give Bret more personality thanks to the dynamic between the two, and he gelled extremely well with Shawn to the point that the two, even injured, put on a pretty good match at Mania XIV.
As for why people may like Austin so much. It's what he represents. Steve Austin came around at the perfect time that the 90's counterculture movement was at its height. Corporate America was structurally at its strongest before the collapse of the economy following 9/11, and many people were feeling oppressed by the long work hours and hating their bosses. Steve Austin represented, much like Dusty Rhodes, the working class man. Whereas Dusty exuded the middle class values of scratching and clawing your way to the top, Austin represented rebelliousness and pushing back against the system. His rivalry with Vince McMahon was paramount in showing this, as the McMahon character was the white collar sniveling boss everyone wanted to beat up, and Austin was the blue collar worker stuck being an employee of this guy.
So I'm not really going to change your mind, but more so say that for four years (1997-2000), Steve Austin was a direct epitomization of middle class culture of the time. He was beloved because of what he represented and how he carried himself. Him being the biggest draw next to Hogan is more an effect this than anything else.
So that's my essay done for today.