How do you knee cap big tech when other countries continue to push forward with it?

You don't need to cap the technological process. You can simply curb the power of corrupt individuals. If anything it would accelerate progress.

Why did we knee cap CIA/NSA/DOD from nominally operating on Americans when the Soviet Union continued to push forward with it?

For what it's worth, our once-and-(hopefully)-future allies the European Union are already on board with reigning in the surveillance industry (leading by example, even). So your question is more like how can we constrain our domestic technological authoritarians when China continues to embrace theirs. And the answer is that it's not a "how" but rather a why - because it is in line with our values based around individual liberty.