I'm 9th generation Canadian and also British by naturalization later. I remember well the US' and other countries' in transit' lounges during the 1960's and '70's when I had to change flights in the US on my way to and from Canada and Europe. They were pleasant, restful.
I too was shocked when the US cut out those lounges and made Canadians, at least, go through the process of entering the US as a new US immigrant (!) in order for me to board my American flights to BsAs. I did not ask to become an US immigrant but just making those flight changes 5 daytime hours after I'd flown from Canada to the US crazily deemed me a new immigrant every time I flew from North America to BsAs for long tourist stays there as a tourist.
This process became more ridiculous that during 2008 or 2009. I was made to provide the name of the Washington hotel I'd be staying in that very night although I'd be in the air half-way to Argentina by night time. I told the Immigration officer that I've never been to Washington and don't know any hotel there. He said I had to tell him a name: if I didn't, he would not let me board my next flight. He was asking me to lie that I'd be staying in the US that night although it was clear to him that I would be sleeping in Argentina, not the US! Unbelievable!
Not seeing what else I could do, I turned on my spot and called out to the rest of that queue to please name for me a Washington hotel. Long silence, and then somebody voiced 'Holiday Inn'. (Maybe that would be enough since the Officer hadn't asked me for a hotel's address or to see my having booked one?)
By 2011, US Immigration stopped asking this question, at least not of people who presented their Canadian passports.
I must have immigrated unintentionally into the US some 15 times in my life! Did the US do away with transit lounges because it wanted to increase on paper the number of foreigners being admitted to the US as new immigrants?