The literacy crash is alarming, and is no doubt agitating this situation in a major way. However, I think what we are experiencing is something like a kind of siloing of private realities. Not the pearl-clutching 'echo chamber' discourse from 2019. But an increasing lack of social competency amongst younger people that is disallowing them to be present others in the world itself.
This is why I still think it is a power problem. Government, however incompetent, still has the monopoly on control and policy. They have experts yelling at them everyday about these problems. But their answer does seem to be more censorship and surveillance, rather than addressing the causes of these problems. As I mentioned, this only exacerbates the problem and makes it more socially dangerous.