[jasonmunro]

Your points are valid, but not entirely correct IMO. What you are describing as abuse is "quote stuffing". Sending in buy or sell orders to move the market with no intention of fulfilling said orders. When I worked for an exchange operator we routinely reported this type of abuse to the SEC. It' difficult to discern the difference between a fast moving market maker (and many successful HFT firms are indeed market makers) and simple re-positioning of the spread because of shot term volatility. Your "evil" HFT firms may be abusing the system by cancelling an order placed a millisecond prior, but they don't make any money if a trade does not occur. Quote stuffing without a trade on the modified price does not produce a profit. Manipulating the market in this way is not a fool-proof way of making money - there still has to be a minimal position taken by the trading firm in order to realize a profit.