Many new innovative companies are being founded in this space and those that are successful are richly rewarded (by selling to FB). The system is working exactly how it is supposed to.
Also remember that in the US it's perfectly legal to be a monopoly. What is illegal is abusing your monopoly position by engaging in unfair practices (which is a rather fuzzy and hard-to-prove thing).
If giants like FB can't innovate and must buy competition to survive despite all the advantages they have, something is wrong.