Let's say you're only allowed to trade once a week, and I buy a bunch of Hooli stock at, say, $25 today. Then they launch Yet Another Hooli Chat tomorrow and everyone has decided that's going to make the price go up. You might want to buy some shares at $27 right now, because you think they'll be worth $30 next week. And maybe I want to see my profits right now for whatever reason (maybe I worry about them shutting down their new chat service by next week and I have a very low risk tolerance) and I'm happy to see some profit now instead of maybe more profit next week. Obviously I should sell to you. I can't do that via NASDAQ because we can't trade again until next week, but if you and I are in contact, we can just trade privately ("over the counter").

If lots of people start doing that, and we all join up, we essentially become another stock exchange. So it's not in NASDAQ's interest (or anyone's, really) for them to voluntarily stop doing things that will just cause another stock exchange to exist that does those same things. The options are either to convince market participants that the new rules are actually going to be better (more profitable) for them, or to lobby for regulation that makes the old rules impossible for someone else to implement.

As I understand it, this is basically the origin story of NASDAQ: the National Association of Securities Dealers believed (correctly) that they weren't getting good prices on existing stock exchanges, and computerizing a stock exchange had just become feasible, so they built an Automated Quotation system that initially just published prices to each other efficiently. Eventually it turned into an actual exchange.

Let's say you're comparing a savings account (1% interest, a day to withdraw), six month certificates of deposit (3% interest, six months out), and cash in your pocket (%0 interest, instant), and the goal is to account for market fluctuation in Laffy Taffy and come away with the most Laffy Taffy in a year.

The cash doesn't appreciate, but you can buy whenever the price changes. If Laffy Taffy is really volatile, working in cash gives you the flexibility you need to maximize your trade value and buy/sell at the right time.

If Laffy Taffy never sees a price change, put your money in that CD and wait it out (assuming no other available investment vehicles). You'll be able to buy a little more pancreatic strain in six months.

The savings account is somewhere in the middle.

A really large quantum for a market that attempts to serve as a proxy for real world fundamentals could be prohibitively risky for participants, and that could reduce overall market participation.

I suspect that there is a sweet spot, and I assert (without evidence) that the sweet spot is greater than the time it takes light to circle the globe.

A lot of 'alternative solutions' to the continuous limit book assume that there's some other mechanism for price discovery so people make informed decisions, but really it is the book itself which provides that information.