Merkel's statement is correct within the framework of the German constitution and German law.
It is wrong, tho, within the framework of the USA constitution and law.
Which is "morally correct"? I'm not qualified to state. Specially since moral is ultimately individual.
However, a law can only regulate a constitutional right (or guarantee) if the constitution grants the law powers to do so, which is not the case here. Twitter's (and other's) decision is perfectly compatible with the USA Constitution and law.
"Oh", you might say, "it should be different!". Ok, there are constitutional means to change it. The constitution can me reformed via amendments. There as rules in place for that.
What you cannot do is apply one country's rules to another, one country's law to another, one country's constitution to another. Even if you think said country's constitution is better.
So, should things be different? Considering I'm the ones that defend that human rights should be horizontally applicable, then yes, they should be different. The US constitution should be amended to cover that horizontalization of human rights, which would also deal with several other issues. However, until that new amendment is in place, the current rule of law should be applicable.
If you think things should be different, make sure to exercise your civic right and talk to your representative about making changes.
Twitter's actions were right (within the law and and compatible with the constitution of the country they exist).
PS. Yes, I'm a lawyer with a masters in constitucional law.. No, this is not legal advice.