I believe the claim is that David Einhorn, Steve Cohen and other super rich hedge fund managers are providing incredibly valuable information discovery services

I believe the claim is that David Einhorn, Steve Cohen and other super rich hedge fund managers are providing incredibly valuable information discovery services to the markets. By by forcing them to suffer the price impact of their trades, we then reduce the incentive of such people to provide more information discovery. tl;dr; Joe 401k should pay more for his retirement savings because by indexing, he's freeloading on the valuable labor provided by prop traders. HFT is bad because it makes this freeloading cheaper. (Weird to hear argument lionizing hedge fund managers and calling out workers as freeloaders coming from left wing types.)