I'm not sure... The method we use and Facebook uses should resize automatically. It does on our demo site (see below) as well as other sites we've tested on. I can't see a reason why it's not working properly on your site. Things that can cause this (which again, I don't see, but maybe I'm missing something) is a hard-coded height on the module div itself. This isn't in our module parameters, but in the template or module position settings.
I'm unsure what else could be locking that height in place. If you have any ideas, let us know. If not, we'll continue investigating.
Feel free to checkout how our demo site works (and how yours should work):
sourcecoast.com/jfbconnect/demo/jfbc-social-modules