“I Saw the TV Glow” is about a TV show called The Pink Opaque. The show is about a pair of teenage psychics that fight monsters. Owen and Maddie watch the TV show. We get hints that there is something more, but there is nothing.
The movie is primarily about Owen. Owen has no hobbies or skills. His one interest is watching TV perhaps because Maddie watches TV.
One possibility is that Owen is a failed telepath. Maddie is another telepath. During a critical period of adolescence, Owen misses his chance at making a connection with another telepath. The trauma of this years later results in insanity.
Another possibility is that Owen has no special powers. He has no character. He makes no decisions. He is only confused by his circumstances, in a state of paralysis. Maddie is the same, maybe even less reliable. Possibly Maddie is mentally ill. Owen has gaps in his memory.
Years pass, Owen is defeated. Owen lives in the world of Mr. Melancholy. Mr. Melancholy won if he even existed. When we grow up the things we liked as kids look different to us. As an adult Owen rewatches The Pink Opaque and it was not like he remembered. It is sanitized, for children. Melancholy subtracts from the version of ourselves we are most worthy, proud. Everything that was important to Owen happened in the past with Maddie and she is gone. Time skips forward.