[bd_at_rivenhill]

What you are describing is manipulation of what I've seen called "book" or "depth" micro price; the sort of thing that got Trillium in trouble (http://www.reuters.com/article/2010/09/13/financial-trillium...). I would expect everyone to take bid/ask + depth data with a large grain of salt if there are no accompanying trades, and use it only in a defensive fashion.

As for quote stuffing, this sort of thing was happening by accident in the early to mid 2000s due to the failure of some exchanges to upgrade their hardware infrastructure to handle legitimate volume. In this sort of environment, it would be easy to get away with spamming/DOS'ing the exchange to put competitors behind, but I doubt that this lack of investment still persists. Might still be possible in less-developed markets though.