One problem with this strategy is that when things go crazy, traders with unsophisticated execution technology start to get terrible fills on their market order

One problem with this strategy is that when things go crazy, traders with unsophisticated execution technology start to get terrible fills on their market orders; they complain to their brokers who complain to the exchange, who busts the trade. If you buy at the flash crash nadir, and sell halfway back to "normal" you're likely to have the buy cancelled, and be stuck with the sale.