In most cities, yes, you are missing something. The several thousand (at least) cyclists who should be out there being traffic so that there's too many to wave to. Instead, you've got only a few, and they've all got a bit of a complex about what constitutes a "real cyclist".

In Madison, cyclists don't wave to each other every time. Here, you'd fall off your bike or have an accident if you tried to wave at every single one. No real snobbery involved, just a lot of practicality. The average spandex wearer and the average denim wearer will both cheerfully return a smile or wave or hello, even if you're wearing the "wrong clothes". Still, the main rule is to be safe and pay attention to the road.