I should point out that some companies are already getting vulnerabilities reported to them for free (in the best case, for the price of a symbolic bounty program) and fail to fix them. See http://reverse.put.as/2014/10/31/patching-what-apple-doesnt-... for one recent example that comes to mind. Giving them the opportunity to pay market prices for the vulnerabilities is not going to improve the situation.
Everything else remaining identical, the only thing the emergence of a free market for vulnerabilities will make efficient is the exploitation of victims that aren't informed of and do not have the capacity to fix them.
The only real fix to the current situation starts with legislation that aligns the interests of the companies that rely on vulnerable code and those of their users. Forbidding the trading of vulnerabilities won't help, and encouraging it won't help either. Recent legislation in the EU forcing companies to disclose security breaches they are aware of is a first, baby step in the right direction. There are many essays by Bruce Schneier on this topic, here is one picked at random: https://www.schneier.com/blog/archives/2004/11/computer_secu...