They are not deciding what Facebook must do in general, but what Facebook must do so that they can sell Germans to their advertisers.
Clarification (edit): With this I mean that they don't have to make pseudonyms available to, say, the French.
Don't know why you're getting downvoted. I absolutely agree that it is not the place of regulators to decide which features a website must or must not have. Let the German people decide for themselves what kind of usernames they would prefer.
No. A handful of politicians decided that the tens of millions of Germans who enjoyed using real name services would henceforth be banned from doing so.