[kasey_junk]

I think there is some information loss (I'm not sure how much). In a non-spoofing allowed world (where everyone is playing fairly) volume at the back of an order book has implications on the price at the front of it. Figuring out what the implication "really" is, is a differentiating feature that market makers can compete on.

In a spoofing allowed word, that volume is meaningless. Market makers can only differentiate on how quickly they can pull their fake orders and how much risk they are allowed to play with. Not something I'm sure we want to be optimize the rules for.

That said, given the difficulty in enforcement of this particular rule, it may be worthwhile to just throw our arms up and say, "we can't enforce it, so lets make it legal and everyone moves forward on an even playing field".