okay, try this on.....the prophecy doesn't say that no one other than the chosen one will be CAPABLE of interrupting the chain of events, just that they WON'T.....and what happens?, mace is CAPABLE of besting palpatine, but DOESN'T in the end, while anakin, by the end of the saga, would seem to be very unlikely to pose a danger to palpatine, but does.....this is the nature of prophecy, it's inevitable however unlikely.....
also keep in mind that palpatine's other major power, besides persuasion, is seeing into the future (see the conceptual link to the way a "prophecy" works).....i would assume that he forsees himself losing the duel, but somehow still ending up on top, or even going as far as to "see" anakin's intervention.....and actually has the brass to go into battle knowing that he's taking a risk, but having forseen that the risk will pay off.....so he is genuinely losing, yet his losing is simultaneously a winning move....as you say, a disgusting amount of self confidence (which will eventually be his undoing).....and by the way, i don't have a side on this, i think you both make interesting points, some that could possibly even co-exsist....
i've also been thinking that it could be kinda interesting if we're never quite sure whether palpatine is playing a game or not....and 10 years from now people would still be debating it, with just a few hints either way to keep it interesting.....