Bleach was a good album, but a bit rough and a little blunt around the edges. It had potential, but you could tell they needed better editing and creative control. Nevermind is an all time greatest album. They managed to get that great garage grunge sound from the first album, and shape and mould it into something commercially viable, with subvert pop influences. In Utero was a risky move, but it was pretty good. They moved on from Nevermind and although the album wasn't perfect it managed to capture a new and deeper sound. All the other compilation bits are hit and miss really, some work well and others just fall flat.
Nirvana are a good band, but not great. However I think it is fair that they are recognised for their work, and I wouldn't call them over-rated. Still they are stand alone figures in grunge for those unfamiliar with it, and I can understand why people would call them over-rated when other big name bands in the genre such as Pearl Jam, Soundgarden and Alice in Chains get a lot less attention and praise.