This to me is a very complex topic with multiple dimensions.
Yes, social media does play a deep role, I think not because of hyper-connectivity, rather the hacks that have been used to make it sticky to users. Instant gratification is like crack to young people. Delayed gratification is a learned skill, which is what you seem to be referring to here.
Couple that with media of all sorts showing people spending beyond what is even remotely reasonable, and making it feel as though this is the new norm. Think about it, flight to Europe? No problem! It`s cheap. In real terms as well. Hotels? No problem. Want it now? I can buy it on my phone.
Look carefully at how people in the USA lived in the 1950s. It was very frugal, people worked hard for what they had, and they valued it because it involved a lot of peoples time. Nowadays, we live in a throwaway economy, and if something breaks, buy something new. Too expensive? No problem. Make it cheaper. Drop wages in real terms, prime business to be hyper opportunistic and fast. This is not Mana from heaven, this is a tragedy of commons.
Why do you think young people are committing suicide? It's because their expectations have not been set correctly. There is a wide gulf between the amount of effort *in reality* that you need to put in to be where you *want* to be. A core culture of fake it till you make it is present, and people pull the trigger when in reality they can't make it - in the timescale possible.
If you're a kid, who is in a "no child left behind school", where if you don't do your work, that's OK, we'll just rebaseline, where parenting culture is always, "it's OK little Johnny, it's OK little Suzy", you're always awesome, and participation = prizes, what do you think will happen when these kids who have been set up to be very narcissistic, meet other narcissists? There's a loser there. More importantly, a loser that can't cope. It's a form of arrested development, because grown people now can't wait, can't work hard for a long time with no payoff, kudos and general cheers all around. It's built a neural hunger for dopamine, because who will tell big John or Suzan that they are accepted? That they are worthwhile?
The kids get it. They are scared that they won't be accepted, as they can't handle rejection or failure. There is a backlash to the culture now, where people try to live simply, economically etc. Unfortunately, when you look deeper, they themselves are creating their own tragedy of commons, as they don't spend on capital investments, but rather on operations. We as a society have made systems so cheap, that they are brittle. There is a brilliant Indian word, Jugaad. Google it for a laugh. It's basically McGuyvering everything, and then wondering why core infrastructure and services fail more often. It's cheaper and faster on capital investment, but it never really solves the problem, as although a great hack when you have very limited resources and no time to survive, it doesn't stand upon the shoulders of giants. Our solutions these days are wheat fields, which need to be replanted every year, instead of orchards that bear fruit for decades.
Grimly, I don't think we will solve this. The problem is, we are instant gratification junkies, not just in social media, but life in general. We operate on feelings, not facts, so don't see the hidden traps, and it costs us. We as a society will have to hit rock bottom to reform, and I can guarantee there will be swaths of casualties along the way.
I hope every day that I'm wrong, or that someone much smarter than I will be able to really solve this. Alas, I feel we will be the pheonix that rises from the fire. Let's hope it's not nuclear.