Myspace didn't expand into new markets and got left behind. FB was legitimately worried they were going to be left behind too.

There's an alternate reality where Facebook fell off, and Instagram never monetized and died like the dozen other competitors it had.

If it was as easy as "industry consolidation is bad" we could write simple legislation to make it illegal for a company to buy another company - but there are too many counter-examples where the alternatives to acquisition is worse.