Austin mexican food is terrible to mediocre at best, but people who have not lived in Houston, San Antonio, Corpus Christi, El Paso, the Valley, etc understandably think Austin's mexican food is really good. The best mexican food in the above cities can be found at the hole in the wall joints visitors generally do not try. Even better are hole in the walls outside of major cities from Houston/San Antonio to Brownsville. I understand why some my not comprehend the attitudes of people from those places because, using San Antonio as an example since it was mentioned above, people generally try places like Alamo Cafe (was great 20 years ago, is terrible now other than its tortillas) and may understandably leave unimpressed.
Matt's El Rancho and Juan in Million are okay at best, but they are like inferior versions of what you can find in Houston, San Antonio, Corpus Christi, the Valley, El Paso, etc. I will say I have spent time in far South Austin lately and there are okay places which are much better than what you find elsewhere in Austin. I did always like El Arroyo until they changed who was running it and it went downhill recently. I like Torchy's but do not consider it tex-mex as it is just people from california making california style mexican food, which is fine but not on par with tex-mex.
The problem with Austin food is it tends to be vastly overrated. Austin has some good food, dont get me wrong, but I have to say overall I would put last or near last as far as major cities in Texas go. The problem is everyone in Austin THINKS everything is amazing by virtue of it existing in Austin.
I'll also note Austin has some of the worst help in the state of Texas that works at its places. I have never been food poisoned outside of Austin, and I have known way too many people getting food poisoned there. I believe there was a new story a few years ago where Austin was the lowest ranking major city when it came to clean kitchens, etc.