I'd disagree with the "instant access to an escapist fantasy world" bit being the core issue.
Kids have had access to escapist fantasy worlds ever since the invention of the paperback, and I don't think "being able to distract yourself with books" will lead to mental health issues.
Books aren't really instant in that way. Plus they're finite, so you don't get hooked on them having a constant new and unexpected dopamine drip. Also i didn't say "distract" I said "escape." There's a difference in that escapism can start to seem like a long-term solution, when it's not and often leads to neglect of your real life, that leads to more escapism, etc.