Heh...the Mirror Universe, and what DS9 did with it, is a whole other thread.
As to what humanity is in denial about--their paradise could NEVER have happened without a steep price being paid. Something tells me there was some serious revisionist history that went on.
It's pretty clearly established how the trekverse human society came about - the third world war. Humanity DID pay a steep price, but no one else was involved and paid anything.
Revisionist history

? At what period are you referring? Now you sound like a typical cardassian, letting envy speak.
As for human arrogance--it's a combination of arrogance and naivete, really, and it is an incredibly dangerous one: to believe that they are the moral arbiters of the universe, yet be so incredibly naive as to how the universe really works, and what the human(oid) nature REALLY is that so often they are unwilling to take a stand...it's pretty sad. Now, DS9 went a long way towards changing this, thank goodness.
Humans have morals and follow them - and they believe they have morals and follow them. Where's the arrogance in this?
"moral arbiters of the universe" - Quoting Dukat now?
As I said, humans follow their morals.
They forced no one else to do the same thing.
Did they try to convince others to accept their morals? Yes, but there's no coercion involved, no pressure - which makes all the difference.
"naive as to how the universe really works, and what the human(oid) nature REALLY is that so often they are unwilling to take a stand" - If you ask for help, the Federation will help you. If you don't want Federation interference, it won't interfere.
It's called NOT being imperialists. If the Federation would "take stands" - interfere - you'll call them imperialists.
When it comes to the Cardassians, I DO think we saw evidence that the change was beginning--through the leadership of Damar and Garak, individuals who both had to change tremendously in that final arc. I believe their chances of true reform are greater because they had a crisis that absolutely shattered everything. Humanity may require a similar crisis--hopefully not, but it's likely. It doesn't have to be a physical one...even a severe scandal or PR crisis could do it.
On-screen, the evidence is scarce - but better than for revisionist human history.
If we include literature - "the cardassians are, indeed, leaving behind this worldview - in part due to their losses in the war, in part due to Federation influence and in part due to their resurgent religion."