When someone cites one of your papers, is it a good idea to send an email to the authors to show appreciation?
Straight answer: NO it's not a good idea

Citing someone is (and should) be neither a favor nor a gesture of politeness. So there's no point to send a thank you email. Thanking someone for a citation seems a way to beg for something. If you want to collaborate send an email explaining why you want to collaborate, or mention that you have read their paper when you meet the author/s. Take pride that someone more senior or expert has cited your work and move on.