That's arguable. I never had a chance to estimate this in earnest, but I have the hypothesis that the majority of HFT transactions are with one another. Sure, they collectively provide liquidity to non-HFT investors (because the order flow has to come from somewhere), but I also had the hypothesis that if the clearing houses (CME/NYSE/etc.) could improve their matching engines and/or consolidate disparate exchanges, that might solve the liquidity problem without HFTs.
What about spread reduction?
Also curious on your perspective of their role in market making. Do HFTs ever end up buying a larger block than they know is being demanded and end up holding some of the remaining for a time?