It's a motion to dismiss that was granted under rules of the court. The rules cited by the defendant (The Secretary of State) in the motion to dismiss:

• Rule 12(b)(1) — The plaintiff did not present enough evidence to show that they have standing to bring the matter before the courts.
• Rule 12(b)(6) — The plaintiff did not present sufficient factual matter to state a claim to relief that is plausible on its face .

The court sided with the plaintiff that sufficient evidence was indeed presented before the court to indicate that the plaintiff did indeed have standing, BUT their argument brought before the court failed to state a claim under either the APA (the Administrative Procedure
Act) or the First Amendment. Thus the court has accepted the motion to dismiss the case, citing:

A concrete injury is “foremost” among the standing requirements

Plaintiff could state in concrete terms the injury to be suffered by those affected by the two avenues of injury they (the plaintiff) had indicated. The plaintiff is the one who brought up the first amendment and the APA but failed to follow through on the argument before the court in terms of actual injury (a court CANNOT assume injury even ones that sound pretty obvious).

More importantly the first amendment issue brought before the court couldn't be held. The court indicated that the Government has a vested interest (in the name of national security) to be all up in the business of people traveling here for work. But that the plaintiff did bring up a point about how that might also hurt their ability to work here, but failed to qualify it in their original argument (that basically means, "I don't think this is a first amendment issue but you've got a point if you want to try something else.")

The motion to dismiss is granted with perjury. The plaintiff cannot bring it back before the courts and cannot usually appeal the decision.

So yeah, the Judge sounds like he was interested in the issue being brought but the arguments that were critical to their case fell apart at the whole "for foreigners traveling here, the US has every right to monitor your social media accounts". The argument that seemed to pique the judge's interest was how that information might be used to remove business opportunities from people traveling here. Which is a good point because once a person is approved to work here in the US, the information obtained by the Visa application cannot be used to taint the work environment the person works in.

However, the plaintiff wasn't able to provide a concrete way of how that would happen (that was outside of the "we're arresting you and kicking you out" which the Government has a right to do). The thing is the plaintiff would need a way to connect the dots on how information obtained in the Visa might get back to their employer and then the employer keeps the person but alters their job based on that information released by the Government. If there is a manner by which that might happen, then yeah, that's a no-no.