1) Saying that some businesses ought to disappear due to the invisible hand of the market, is just like saying that things ought to stay down due to the invisible hand of gravity. The market is a powerful force, but that doesn't mean its outcome is always what we want.
2) It's a feature of the free market that firms go out of business all the time. But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane.
It looks like (1) proves that we need some restrictions on competition, and (2) proves that we need some redistribution. We may quibble about how much, but taking a Strong Principled Stance against these things seems wrong.