> won’t stop the Chinese from mining centralized social media databases

that's not the issue; the issue is control of the network

> Wouldn't the right solution be to protect the citizens from all threats, foreign and domestic?

No. In the US government's view, its responsibility is to counter potential foreign threats -- and not just foreign, but adversarial (this wouldn't be an issue for a social network controlled by the UK or Japan, for example) -- which would include a highly pervasive social network controlled by a foreign government that is the US' largest adversary.

As for whether social media companies in general are good or bad for American society, that's a completely separate question. (I tend to think they do more harm then good, but it's still a separate question.)