>Concentrating trading in a few hands is the problem we had - too big to fail

No. You're confusing things. High frequency trading had nothing to do with financial bailouts. To my knowledge, no high frequency trading shop has ever been bailed out or deemed too big to fail.

>HFT will lead to barriers to new entrants (because of increasing startup costs).

Please explain this, how does HFT increase startup costs?

I'm not sure who you think benefits the most out of high frequency trading, but it's not huge banks like Goldman Sachs. My understanding is that the best high frequency shops are relatively small. They're made up of a mix of programmer and quants, not traditional investment bankers.