Actually, the underlying concept you mention is not true. US Govt (though does not encourage dual citizens) as well as Indian Govt recognize dual citizens, meaning, you hold allegiance to more than one master at a time. The Indian law EXPLICITLY recognizes more than 1 master for minor children. So your statement "All the laws written around it simply seek to uphold this principle", is not true. In fact, the opposite is true, meaning the laws are written to accomodate multiple masters. It is the implementation by the govt agencies with respect to the law that has gone awry.

The interpretation by MHA, w.r.t Indian govt denying passports to minor dual citizen children is faulty. If one is a citizen, one has a right to hold the country's passport (with the usual exceptions per criminal laws).

I do believe that once somebody is of age, they should hold allegiance to only one country. But the law is what it is, and it does not matter what I or you believe in.