I think it's a question of the herd's welfare being sacrificed for the "social good" which is mainly the good of the elites that prosper from the status quo. Adam Curtis's documentaries go into some detail on how individualism arose and ironically twisted into a kind of consumerist conformity.
You're speaking of mental health as personal expression and as authenticity. Curtis shows how that view from 1960s morphed into a more repressive norm when we discovered that, contrary to Rousseau, we're not inherently gentle or innocent. So we turn to technocrats and the free market to solve society's problems, leaving us to the infantile task of overconsuming the world's resources.