[hft_throwaway]

But even they admit that a market flashing between 100.01 offer and 100.00 offer is sometimes beneficial for them. It says their execution algo will attempt to "pick off" the 100.00 offer with IOCs if they are representing a buyer.

Flashing orders with the intent to manipulate is wrong and is illegal already. It doesn't matter if you do this by hand or with a computer. Putting up a tighter best price, even if it doesn't stay put very long, can only be beneficial. At least some of the time, other traders will get filled at a more advantageous price than they would otherwise.