The important part of social networking is understanding that everything that you share in it becomes public information that can be used in your favor, or against you.
At first people used this as a mere form of communication. However, as more applications began to be added to social networks, they became more "useful". For instance, while some people use Facebook to create a new version of themselves and voice out their thoughts, others use it to push their businesses forward, offer discounts, and build clientele. Therefore, think about the importance of being so "well-known" in a niche which is meant to portray our most private thoughts and feelings. Maybe one day we will make some sense of the role of social networking in our daily lives. For now, keep your thoughts to yourself and be careful who you call a "friend" these days.
Alcohol usage among teens is a good comparison for social media harm. Once, society didn't really talk about underage drinking. It was something that was considered taboo. Surely only the delinquent teens would drink. Now, we no longer hold to that idea. We talk to teens about drinking and the dangers it can pose. Teens go through alcohol education at school and, hopefully, at home. There are even commercials encouraging parents to talk to their teens about drinking. We need to start educating young people about social media and the dangers it can pose. Teens need to know how to use social media responsibly. I think they should be held accountable for online bullying just as they are for physical bullying. Teens need to know what information is unsafe to post. They need to understand the social rules and educate for using social media.
While it's possible to overdo anything, I think social networking is just an extension of other kinds of communication like talking on the phone or hanging out on a street corner with a bunch of other kids. It's not necessarily better or worse, but it is newer, so we don't know how to deal with the potential problems as well as we should, yet.
At least with social networking kids are writing (albeit not very formally) and using technology and their own creativity. It's not just blab, blab, blab.
I agree that there is often little postive value in the interactions mediated by social networking sites. However, "often" is the key word. There are times when taking part in social media can be categorically beneficial, even if those times are rare. To me, this means that social networking sites are not a complete waste of time.
If kids weren't wasting time on facebook, would they be spending their time productively in other ways? I think this is question points to the relative neutrality of the social media trend.
The dangers posed by social media that you mention are real, but I agree with the suggestion above that education is the answer to those dangers. We probably don't need to shut down facebook in order to keep kids safe.
I think that your worries have some merit, but they are not so grave as to make us think we shouldn't get on these sorts of sites. What is needed is for teens to know enough not to make too much public or not to deal with strangers. After all, cars kill plenty of teens and we don't say we should do away with them.