A smaller tick size does not necessarily translate into lower transaction costs for investors. Market makers' competition for queue priority will ensure that queues are over sized with liquidity when the tick size is larger, creating more adverse selection for market makers and lower transaction costs for investors. The mechanism of action is that queues remain sized with depth even when the fair price breaches the BBO because there remains a nontrivial probability that the fair price will bounce to the other side of the BBO, returning the market maker's posted size to positive expected value territory. Market makers have an incentive to do this when the tick size is large in order to preserve time priority.
This mechanism doesn't exist in small tick stocks since there is no cost to pull an order, since time priority doesn't exist in the limiting case of infinitesimally small tick sizes.
My experience has basically confirmed this theory. I have run market making algorithms in both small and large tick stocks and found both categories to be equally difficult. In fact it's hard to imagine it any other way, market makers will compete away any difference in edge, reducing the size of the pie to near zero in both tick size categories.
My findings here only apply to tick sizes below 100 bps.
I do however agree that it helps to create a speed arms race. But I see that as offset with more simplicity of larger tick sizes, order management is much easier.