Not exactly. As I recall, there was a carve out for cases where the parents hadn't met the children before the foreign proceeding. The biggest group impacted by this were those from Korea, which basically had an option to airmail the children to America. Most foreign countries required the American parents to travel there first, which would generally end up satisfying the American law which went into effect in 2000.
I adopted a girl from Korea via Catholic Social Services.
Getting her US citizenship was just part of their process — no problems at all.