With the major caveat below, on the face of it, it doesn't seem much less arbitrary to tax by citizenship than by residence in certain cases. For instance, as someone that grew up in the US and went to public schools, I certainly used far more public resources there than in my current country of residence, and would also (as a citizen) have access to an indefinite further amount of resources such as consular representation, retirement benefits if retiring there, etc. It seems about as arbitrary to me to pay taxes in a country that I cannot unilaterally choose to continue living in, due to immigration obstacles.

However, given that the global consensus is to tax by residence, the US should absolutely change its policy to avoid the hassles due to this inconsistency.