Increasing efficiency is pretty critical. For the vast majority of markets, there's no such thing as 'serving every customer'. Companies can always serve customers more especially if they can reduce the price.
However it takes capital to do this. It's not just about liquidity, investors basically influence the cost of capital for each company which has a big impact on how many customers each company can serve.
Once you have served every customer the only way to make more money is to take customers away from other competitors, or grow the market as a whole. Traders do not influence the size of the market, they only increase efficiency, so the expectation is that you run into diminishing returns stays.
There is more than enough liquidity in the markets. Any more liquidity is not providing any value.
>Without these trades, the market would lack liquidity, and companies would see an increase in their cost of new capital - which is bad for everyone because it means companies wouldn't invest in growth, equipment purchases, new jobs, etc...
The Fed is already taking care of that. The bigger problem is that there is no reason to invest the Fed money and grow the market.