No startup or innovation should happen at the cost of harming the userbase.

You can take the good with the bad or have neither in some idealistic world where only one exists. You can even limit the bad (oftentimes limiting the good as well), but you shouldn't say in absolute terms that innovation with some bad should never occur even if there is significant good.

Ultimately it comes down to whether a user should be free to choose whether to use such a service. Ostensibly the user is receiving some benefit despite this "harm". If the harm outweighed the benefit there would be no user.