I don't think it's overdiagnosed, but like you pointed out, prpl, there's a difference between a single episode and chronic. I do though remember learning in my Abnormal Psych class that of people who have had one depressive episode, about 80% of them will have two or more depressive episodes total in the course of their lives. So while some people may easily pull out of an episode, it is likely that they will fall into one again.
I think in general mental health is stigmatized and underdiagnosed, if anything, because of people's fears of how the diagnoses might impact their lives. To some extent this is understandable - the height of stupidity IMO is that in the US, a psychiatrist cannot be seen by another doctor for any mental health struggles or they are liable to lose their license to practice. While certainly their mental health should be taken into consideration when licensing, psychiatrists of all people should know that a mental health disorder does not necessarily equate to inability to perform one's job well.
@empertet listed some good reasons we make ourselves more susceptible to unhealth in general, although also for the most part I seem to remember that most mental health disorders whose pathology is understood have at least a genetic component, if not a significant hereditary basis. Many seem to operate on the stress-diathesis (also called diathesis-stress) model, where environment can trigger genetic predisposition to mental health issues to be expressed. Alcoholism and schizophrenia are both believed to be disorders that work in that way: someone with alcoholic genes who regulates their drinking may never become alcoholic, while someone with schizophrenic genes whose home environment is stable may never become schizophrenic. Stressful events can also impact the timing of manic-depressive swings in bipolar disorder. So, environment can certainly play a large role in manifestation of an illness, and ironically the stigmatization of mental health makes it more likely that people will be more mentally unhealthy and not seek treatment.
Fortunately the historical trend is increasing acceptance so I am hoping that continues and I try in my life to be an advocate.