> lender makes money,
Theoretically, there is no need for a lender.
"I borrow 1 trillion from pension funds X, do <some complex sequence of trades>, and in the end return the trillion to X, all within zero seconds" and "I perform <some complex sequence of trades>, requiring net-zero capital from my end" are equivalent statements.
Rational actors should recognize them as such, and the marginal cost of lending (interest) should converge to zero – in other words, X should concede that they do not provide anything valuable to the trade.
Practically, existing protocols might not be amenable to that insight, and the lending market is apparently too inefficient to support 0% flash loans – at least for now. So the value that X provides is protocol backwards compatibility, I suppose!