Maybe nit-picking ... but shouldn't a very sophisticated algorithm precisely incorporate the reliability/speed of the various exchanges (maybe based on past and current latency or downtime which weighs the risk of a transaction not clearing at a given exchange). The smartest algorithm should be able to win such a battle on average.

And the handful of cryptos that don't have tx fees (NEO/IOTA spring to mind) have already been arbitraged to within ¢¢¢ of each other.