The problem with your idealist view here is that an individual or even a big corporation can't compete with
an entire country. Douyin (Chinese version of TikTok) was subsidized and promoted by the Chinese government. Even a rich American corporation can't compete with a government that heavily controls which apps their users are allowed to use (the problem you're talking about).
Once the (addiction-tuned) algorithms were mastered and the back end was nice and stable ByteDance made their Westernized version for the rest of the world, TikTok. Again, subsidized and promoted by the Chinese government.
A lot of people are worried about the data collection but I don't think that's as big a deal of having control over the algorithms. If the Chinese government says, "promote this" to ByteDance it gets promoted (can they realistically say no?). It could be propaganda, competitors of people they don't like, or similar. If they say, "get rid of this content/these users" it all but disappears.
The US government can't control media like that (and is explicitly barred from doing so). They can ask for such things (as nicely as possible) but that's it.
Because of the popularity of TikTok it has an extremely powerful influence over millions of Americans. Is it in the US's best interests to allow that level of control to persist?
The fact that so many people called up these Congressmen because of a pop-up in the app is really strong evidence of the sort of propaganda they can distribute and the level of control and influence they can have (indirectly) over the US government. It's not a good situation.
Perhaps a bill that says something like, "It must not be possible for foreign governments to influence algorithms or target specific users or categories of users with propaganda" might be in order. I know that's a tall order but there are a number of low-bar steps that can be taken to prevent or at least slow down such foreign government shenanigans.