Can you point me to the law that started recognizing it? I'm pretty sure that the U.S. position all along has been that they don't encourage it but it certainly isn't illegal and isn't a threat to U.S. citizenship unless the person knowingly performs one of the recognized expatriating acts.
The country has recognized dual citizenship for many years. Lots of American Jews are and were citizens of both Israel and the United States. A child born on this soil is an American by our laws.