Because if the Chinese government actually is using it or plans to use it as a propaganda tool there is no amount of money they would accept. The fact that it wasn't sold to a US company offers credibility to the fact that the product is useless to China if it's controlled by a US company and they wanted to keep the data they learned about addiction to themselves. Also probably wanted to build some outrage among young users for the government banning their favorite app

The sell or be banned part, instead of just banned, was most certainly lobbied for by the US social media companies hoping to get it on the off chance it had served its purpose, wasn't as useful as China had hoped, or the slim chance they really did just want Americans to copy dance trends.

In a fire sale the seller has no leverage.

if US government says who is allowed to buy and buyers collude (by pooling financial and political capital together) they can easily not fight a bidding war and lowball instead