For me, it called attention to the fact that others were leading more interesting and dynamic lives than me. Yes, it made me more stressed. But it also brought me out of my comfort zone, and it led me to honestly ask why I wasn't getting more of what I wanted in life -- and to do something about it.
Facebook has my gratitude.
The world was full of ways to compare ourselves with others before social media came around. It isn't going away. Facebook is just the latest iteration, and also happens to be the most surface-level, un-holistic, and competitive channel yet conceived for this kind of behavior.
Once people get competitive about "happiness" and "self esteem", there's a way that they lose sight of the original "goal" in the attempt to outdo each other.
We should all explore the different available paths in life and strive to gain from others' perspective and experience, but the Facebook news feed is not a particularly good way to do it.
A lot of things strike me as vastly more surface-level and un-holistic: what kind of car you drive, how big your house is, how rich your neighbors are, how immaculate your lawn is, etc.
Regarding your final point, as it happens, a pretty sizable chunk of Facebook feed items tend to revolve things like the cars people drive, their house, and their farmville "lawn". At least that's how it was when I was using it. The more things change...