I’d rather have penny-wide spreads on SPY than restrict trading speed for HFTs. Providing liquidity is beneficial to everyone, even if insane amounts of money are spent by HFTs to gain an edge.
The bad part of HFT is paying the smartest young minds this country has to offer to figure out how the parse GDP data as fast as computationally possible so they can send in an order before other players can. That's a dumb game that doesn't provide much benefit (besides speed in sparse critical moments adding a few % to the funds ROI).
They can arbitrage all day, but don't let them buy every Taylor Swift concert ticket the moment it goes on sale because they have a co-located office with a direct fiber line, ASIC filled servers, and API access.
I have also seen enough to be quite sure that many hft strategies are quite normie investor predatory.
Again, I’m not zealot. I trade stuff. I love liquidity. I’m happy to pay someone some fraction of a penny to change my mind. Service provided. But the returns from vanilla liquidity provision commoditized long ago to uninteresting margins. That leaves a lot more of the hft alpha pool in the predatory strategies and capital flows where the incentives are.