The market stops rewarding those who do the best research and make the best value judgments about stocks and simply rewards those with the fastest exchange conn

The market stops rewarding those who do the best research and make the best value judgments about stocks and simply rewards those with the fastest exchange connections and best hardware (who can parasite upon the research and risklessly make money by covertly front running it). If value investors stop being rewarded for doing good research and correctly assessing the true value of a stock they will usually withdraw from the market (c.f. market for lemons: akerlof). It should be pretty obvious why a stock market whose values are disconnected from reality is a bad thing, and why having a pool of investors who do good real world research and get rewarded for it is a good thing.