So because people traded (sometimes) using services that had associated fees... Wall Street won? There's nothing in this article that supports the click bait title.
Because what linked is just a promo for the book by Spencer Jakab "The Revolution That Wasn't"
Actually it is the economist review of the book, it is in the Culture section.
Well for sure bagholders of worthless GME stocks aren't winning, but the high volume of transactions spread a lot of money everywhere. 1 or 2 hedge funds are still struggling, but that's their problem, "Wall St" is bigger than these 2.
I'm pretty sure market makers have made a killing off option premiums, especially once they realized the way to kill a gamma squeeze is to jack up premiums to the max to kill momentum (as observed during the despac squeezes)
Market making is a business that avoids taking sides over long time horizons. In this business, they need to be hedged in some way almost all the time, so what you said makes no sense.
Though, yes, if uncertainty rises, market makers will quote wider spreads, which results in huge implied vols when you try to buy options (particularly not at the money).
Some small hedge funds no one had heard of had a bad year, while market makers like Citadel who thrive on volatility and high volume made a fortune.
Melvin Capital definitely wasn't a HF "no one had heard of"
It's essentially the old adage about selling shovels during a gold rush.