That’s actually a great point. Collecting PII is NOT illegal, as far as I can see. Nor can it be illegal. Same for personalized ads.
Consider a real estate agent. To show you the right kinds of houses to buy and finally make the contract, they have to have enough PII about you. If they know nothing about you, they’ll end up showing 1-bedroom studios for a family of five and a three bedroom suite for a bachelor living alone. Similar arguments can be made for all kinds of service providers.
Now onto the issue of FB, the only service they offer is “communication tools with built in personalized ads”. PII is necesary to provide that service.