You got some good replies to your question (which is a very good one!) but I'll take a stab at it like this: A market is "too passive" when it becomes exploita

You got some good replies to your question (which is a very good one!) but I'll take a stab at it like this: A market is "too passive" when it becomes exploitable due to perfect predictability. But - that is the very thing that will keep it from ever reaching that level of passivity. Exploiting it is an active step, then someone else bets against the exploiter, etc.