.....I think you are exaggerating there.......
Actually, no. The Luftwaffe's strategic presumption was that superiority of equipment meant they would be able to defeat more numerous enemies. That presumption was based on the idea that German scientists and designers were superior to every other nation in the World. It's one of the reasons that Hitler deluded himself into the idea that the
versuchs "revenge" weapons would save the Aryan peoples. For the Luftwaffe or Hitler to believe otherwise was to accept that defeat for Germany was inevitable because they were not superior to other races.
You can see this belief in Hitler's quotes on science, such as: "
Die ganze Natur ist ein gewaltiges Ringen zwischen Kraft und Schwache, ein ewiger Sieg des Starken über den Schwachen." "The whole of Nature is a mighty struggle between strength and weakness, an eternal victory of the strong over the weak." Hitler couldn't accept that the Germans weren't "stronger". i.e., scientifically smarter/better, than his enemies, because to do so meant admitting that "his people" would be defeated. Hitler was lambasted by his own scientists for driving Jewish scientists out of Germany in the '30s, but he persisted because he thought the innate superiority of the Aryan people meant they could overcome any loss in research and still defeat his "inferior" enemies. After all, Germany had only lost WW1 because "the Jews had stabbed them in the back!"
The idea permeated through the Nazi ranks and even the general population. Hitler promised that he would lead the "Aryan people" to victory because they were the anointed ones, the German population (not just the Nazi Party) loved the idea and supported Hitler. Sure, there were plenty of Germans that realised the War was lost, but even right up to the end of the War, you can still find quotes from ordinary Germans saying that Hitler will save them from the
untermenschen with his "secret weapons", and that belief is based on the idea that Germany could produce those war-winning weapons because Aryan scientists were supposedly smarter because they were racially superior.
On the flip side, if you've bought into the belief that "good Aryans" are going to win, you don't want to accept responsibility for a failure because that means you aren't a "good Aryan". If you can't defeat
untermenschen you're not up-to-scratch and must be of racially inferior stock. Just as promotion in the
Wehrmacht became dependent on personal scores, demotion (and even arrest and execution) was the result for those held up to be "failures". So the Germans officers, including those in the Luftwaffe, became very good at denial.
The Luftwaffe was actually less representative of the Nazi Party than the
Kriegsmarine or
Heer, but they were still just as prone to the "I am superior, therefore I can't be defeated by inferior Allied tech, it must be something else to blame" idea. For example,
Jadgwaffe pilots shot down in the Battle of Britain regularly insisted they had been shot down by Spitfires, not one wanted to admit he had been shot down by an "inferior" Hurricane. This was even prevalent in the 1940 Battle of France, when there were no Spitfires involved! Some German pilots claimed they had had a technical issue, and that was the only reason they had "failed" in being shot down by an "inferior enemy", such as "my engine lubrication wasn't working....."
In the case given, Milch is effectively berating his engine supplier for not being "Aryan enough" to give him a superior engine to that of his enemies. As Hitler reasoned, the tank manufacturers had managed to develop tanks better than the Soviet T-34 and KV-1, so if Milch and his suppliers couldn't produce planes that restored Nazi dominance over the Eastern Front (or Malta, or the Desert, or the Channel), it must be because they were not "good Aryan stock" or even traitors! As Milch's father was Jewish, he must have felt especially vulnerable to accusations of not being "good Aryan stock", so he was very motivated to find (a) a solution to restore Luftwaffe air superiority, and (b) someone else to blame his problems on.
Ironically, you can also claim the War was only won because the British (i.e., the English) were just as prone to a racist belief of superiority. Churchill and co refused to countenance surrender to Germany in 1940 because they couldn't accept the idea that the British Empire could be defeated. Why? Because the English, dear boy, were superior! Yes, call it nationalism, but it boils down to belief of innate racial superiority.