The implication of your take is that we should exploit children as much as possible because it might pay off big, as long as we don't cross the line into "worst childhood of all time".
It's not positive, but it's "I have a splinter in my finger" relatively to what many (most?) children experience who don't grow up in the top 1%.
There's another post on the front page currently about over 100 kids who were illegally employed in hazardous jobs, and yesterday we had an article about laws being proposed to remove the hourly limits on child labor. I think the children affected by those things would prefer to have had their face on their mommy's instagram and never have to work a day in their life over working in a meat sanitation plant from their 13th birthday on.
It's all relative, but I guess that's an unpopular opinion. Maybe most here feel closer to the kids on instagram than those in the meat packing plant.
I don't think it's reasonable to excuse or downplay exploitation of children in one way because exploitation of children occurs another way elsewhere. We can argue against addressing harm to children because other harm happens to children all the way down to the source of Omelas's good fortune if you like, but I don't think this results in positive societal outcomes.
"Lifelong distortion" is a strong claim that hasn't been demonstrated. I wonder how much of this consternation for kids being present online is a generational thing. People from the generation where privacy was the default are reacting badly to the movement towards no privacy being the default. Of course, those from the old generation take it for granted that their way of living is the right way and the alternative is "distortion". I'm also from that generation and I cringe at how easily people destroy their own privacy. But I don't make the mistake of assuming this emotion has normative value. The world is moving to a social-media infused existence. Being a digital luddite isn't obviously the superior lifestyle. Preventing kids from making the most of it isn't obviously in their best interests.
I think their point is that you and many others are underestimating how bad a "normal" childhood can be.