Count me with Sydney's defenders. Yes, there are more "exotic" places in Australia - it's a first-world 21st-century city with all that implies, after all - but it has a lot going for it. "Most overrated" on the entire planet? Methinks not.
A bit off many radar screens, but among those who haven't been there Casablanca has to be near the top of the "overrated" list because of a huge gap between image and reality. It has an exotic image from the movie but is really a collection of concrete from the second quarter of the last century. Things to see or do are few and far between. (I'm not dissing Morroco, been there and loved it, hope to return; just that city.) The movie was filmed on a Hollywood set.