That would have severe economical impact, so nobody dares to go there which is why all these salami tactic solutions are being thrown around. Personally, I think your suggestion has merit, since we can observe that not only children's mental health is severely impacted. Another advantage I see with this is that clear lines allow for clear enforcement that would then get a lot less expensive. I mean, the overabundance of malicious ads should also go into this pot. Another idea would be to put social media companies under strict rules and compel them to install human moderators to enforce them, think dang or tomhow.

Edit: it works on HN (rule wise and moderation wise), so it could work on other platforms, too. Of course that would be expensive for the companies, but frankly, the companies are causing the current upset, so why not place the cost with the ones causing it instead of impacting everyone and even socialising the fallout like lawsuits.