It's overrated only by the person or individual that rates it as such. There is no real purpose of overrated. It's opinion based! Mental! I think cookies are great and other think not! I like MMA and think it is great others do not feel it is. The shopping mall in which you are referring to is overrated based on opinions and not facts. 

Nanluoguxiang itself is, there's not much to it. Gulou east street isn't, especially when it comes to video games, collectable figurines, guitar shops and most rock related things (they have the best). For clothes, it's another story...
Nanluoguxiang used to be great because of the many bars there used to be, but now there are only a very few left, and they're really expensive compared to before. Now what's nice there is the food during the day.

I think Nanluoguxiang is quite useful for Christmas shopping actually. If you can ignore the massive crowds of people and selfish drivers trying to sqeeze past the crowd in their shiny cars, then you'll probably find cute little knick-knacks to buy for friends/family back home. It's especially good if you want to buy Chinese retro stuff like old thermos flasks, Feiyue runners, scarves, cups, tea pots, t-shirts, army wear, cute Chinese coasters, Tibetan jewellery & accessories, silk products, hats, socks etc.