To me it seems to be a question of capability. America in this situation sounds like a skrawny lifeguard yelling at big burly surfer dudes to stay out of the deep end. We want the authority to regulate across borders and to maintain our margin of superiority, but do we have that ability? If we don't have the ability to lead this industry, we shouldn't be granted the authority to regulate it either. At least not globally from within a vacuum.
If America wants to regulate what other countries put into space, maybe we should have enough of a presence in space to be an authority figure.
I haven't seen the U.S. government put a fair proportion of their effort into space technology in decades, yet we still expect to be the global harbinger of regulation. If a private company can make a 5cm X 5cm X 5cm satellite and we can't track it maybe the responsibility should be on us to improve our tracking abilities rather than sangbaggging everyone else to support our faux superiority.