There's not necessarily wrong. Despite the vapid and damaging nature of most popular online media, isolating a child from it might have even worse social consequences when their real-life peer groups discover that they're not on social media or that their parents have neutered their phone. Some kids would turn out fine after that. Others would be socially destroyed for life (maybe with the right therapy they could become well-adjusted, but high quality therapy is rare).
No, they are a solution for parents who want to use them, and that's all they should be. Their existence demonstrates that it's possible to handle this without regulation, other than the desire of some people to inflict their preferences onto other people's kids.
Do they work currently? Not really
Are they too complex for the avg joe to work out. Unfortunately yes. (Something about the smartest bears and the dumbest humans)