That said, in your scenario (you were prevented from trading) how does anyone make money? You were (probably) paying for a trade (which did not happen) and you were using infrastructure that costs money (placing orders), and no one was able to trade against you. That is not a great business model...
Also, none of the groups we are talking about are banks.
Oh, and BTW, order cancellations cost money. Cents, sure, but when you are making money on a 1c spread, you would also benefit from a 1c cancellation.
Other than that, I've been tempted (and many times succumbed) to raise the limit just to get that trade. And then you see the price go up again before your order goes through. It'd be hilarious if it wasn't infuriating.
If the order is coming from a retail brokerage that's a terrible guess - how often do you think someone goes into ETrade and tries to move $20M of GOOG?
Big orders come from institutional investors. Those are explicitly the orders that market makers are trying NOT to trade against, and that's why they try to buy order flow. Order flow is known to come from players who aren't making big orders.
If the ask price for a security is, say, 5.51 and I put my limit at 5.51 the chances of getting the order filled were pretty low. If I was willing to go to 5.53 the chances would increase, if the order was 5.55, I'd probably get a fulfilled order at an average price of 5.53 or so. Not a huge difference on small orders (say 1000x2c = $20) but enough to make a "big" volume, small spread strategy pretty much useless.
All you've discovered is that when you sell a stock, you lose both the upside and the downside.
Once you've accepted the order you are legally obligated to deliver in T+3 days. If you fail to deliver you pay big penalties, your broker shuts you down, all sorts of bad things.