Why's it a waste? Low latency traders facilitate risk transfer in thousands of instruments at razor thin margins using automation. They keep prices efficient through arbitrage or predictive modeling. Even during extreme market stress I can trade SPY in my brokerage account within a penny of its true value. If the S&P 500 index futures or the S&P 500 stocks move, someone will update the price of SPY instantaneously.

You want them competing with each other. To win they have to make the tightest price before a competitor, which either lowers their margins or requires them to bring new information to the market sooner.

If you accept that markets require intermediaries to bridge liquidity gaps in time, place, and product, then high speed traders are far less wasteful than the firms they replaced. Consider this: In 2000 Goldman Sachs bought Spear, Leeds & Kellogg (SLK), a large NYSE dealer. SLK employed 2500 people and earned over a billion dollars annually. That's one firm on one exchange. Each market had thousands of men in jackets yelling at each other, making a much bigger spread on transactions, and giving less accurate pricing.

Today there are a couple thousand people involved in low latency trading across all markets/firms and the entire industry makes a few billion dollars a year. Teams with a handful of quant researchers make markets in every listed stock globally.