I interviews interns from a school where they all ask their students to rates themselves like that.
At first I was put off, but now I interpret it as their own personal scale, with 5 being what they the best at, and not as "I know everything about this".
But even then, the best candidates are usually the ones who rated themselves the lowest.
That makes sense. The more I know about a topic, the more I know about how much I do not know. If I know a topic very well, I also know how very little I really do know, so I'd rate myself much lower.
