Sports are a competition, one team will almost always be better than another. Why should the superior team limit themselves? Sports get lots of spectators, who want to see a spectacle. Do they want to see the team doing nothing and just maintaining, say, a five point lead, or doing their best to score as much as possible, possibly shattering previous point records, achieving personal bests, etc. I know which I'd find more entertaining to watch.

And are you really saying that it is more insulting for a team to play well and win by a huge margin than for the team to handicap themselves? To say to the world that they're simply too good to compete with the other teams? It's the latter which is more insulting and degrading.

There are rules of good sportsmanship regarding the attitude with which a team wins or loses. That means the American team shouldn't brag, shouldn't be rude, shouldn't trash talk, etc. Good sportsmanship has nothing to do whatsoever with not doing your best, and winning by as large a margin as possible however. The American team should try to win by an 80 point margin, and in the next olympics they should try to win by an even greater one and so forth. If other teams are upset by this they can still compete for other medals, or improve, or drop out of the competition altogether. It's their business.