Buying and quickly selling a stock requires a buyer and a seller, so it doesn't seem like an intrinsic property that real liquidity would be increased. Moreover, fast automated trading seems likely to increase volatility.

I tend to agree that for long term investment it probably doesn't make a huge difference except for possible cumulative effects of decreased liquidity, increased volatility, flash crashes, etc. Also possibly a loss of small investor confidence since the game seems even more rigged in a way that they cannot compete with.