That's how the internet has been. That's how I feel about US tech giants getting all my data. They write their privacy policy, they dictate their terms, they follow US laws. I have absolutely no choice or voice or vote, unless one considers "yo dawg just build your own internet" a realistic choice.
I don't feel like the purpose is to drive out foreign competition. I feel like the purpose is to enforce privacy as a right, and I fully support it. I also fully support the right to transmit data across borders as long as the destination country also respects my privacy and rights instead of treating me as an alien and potential terrorist. Is that too much to ask for?
And in general, is following the rules of the country you offer a service in too much to ask for? Local laws apply to brick and mortar business; if Walmart wants to come to my neighborhood, sure go ahead, but please respect our laws. I don't see why internet companies should be above the law either.
GDPR is replacing rules dictated by US corporations with democratically established rules written by our representatives. It's unfortunate that there's now a clash between US laws and EU laws, but it's not the end of the world.