The biggest downside is the lawyers take a massive chunk of any award and the actual victims are often left with very little. Or, even worse, the victims get worthless coupons (like with many credit/PII breaches - the award will be 1-year of credit monitoring from the company that allowed the breach in the first place).
I told them that I will certainly not start to build a credit score at 40 yo so they will have to find someone else.
2) The consumer protection laws we do have, and the bodies to enforce them, are relatively weak and enforcement is spotty at best. The most recent serious attempt to kinda fix this is the formation of the CFPB, and one of our two relevant political parties deliberately prevents it from working when they hold the White House (sample size of one, admittedly) and has been trying to totally kill it, in the legislature or (better, because it’s popular and this is deniable) in the courts.
IANL - however, in the US and in US States, many serious cases have been decided in favor of the consumer, over decades. It is the most recent waves of privacy versus ad revenue that are indeed, very weak. It is awkward to defend these regulators since their failures are sometimes glaring, however it is my impression that serious settlements against industry can have silence or "gag orders" attached, and they often do. The industry lawyers can argue that the news of the settlement alone constitutes additional commercial damage to the company, and of course they are right in a narrow sense.
I'm not sure that's ever happened in this country. They pay all sorts of lip service, but when challenged or under pressure, the US makes a lot of excuses for leaving its own people behind.
Thankfully we can repay that favor and see how they like it when there's nobody left to defend them.
The idea of private litigators is to complement the innate limitations of federal/state lawyers, by offering profit as an incentive.
Ideally yeah Americans would have stronger laws around TOS, customer privacy, data handling and security, and robustly funded state lawyers... but we don't.
Practically speaking, such gaps are not unique to technology. Every industry has this same problem, and your awareness of those problems is reflective of the general public's political engagement with this thread's topic. So having gaps that private litigators address is really quite normal and part of the incremental progress of legislation and state enforcement.
Do you need a longer list?
