So what’s the alternative? Pretend we don’t live in a digitally connected society and set our kids up for failure when they get one years after their peers?

Let's assume for the sake of argument that social media is extremely harmful to children. Which means the answer to your question is "yes, obviously". If people were running around giving their kids fentanyl, you wouldn't say "but my kid's friends all use fentanyl and he'll be an outcast if he can't". You would say "any friends that he loses over this are well worth avoiding the damage". Why would it be different just because it's social media?

Keeping your kids off social media is setting them up for success.