Well sure it's for profit, but what exactly do we (the society) get if we allow millisecond investments in our companies? Compared to classic, long-term investments.
The honest answer is probably nothing.
As far as I can tell, it neither benefits us, nor costs us. It siphons off a tiny fraction of money, too small to notice, but large enough in aggregate. Some parasite gets to survive, which is annoying if you look directly at it, but ignorable if you don't.
Not at all. If you, for whatever reason, need to sell right now, putting in a market order in an illiquid market can cost you a lot.
It can be discussed how big the contribution of HFTs to market making really is (large companies or exchanges often employ dedicated market makers, I believe?), but the benefit of market making itself should hopefully be obvious.
If the HFTs only trade when the market is already made (or will certainly be, milliseconds later) then they're not really adding any liquidity. They're just doubling the liquidity which was already sufficient.
Are high frequency traders trading in illiquid markets?
That would be surprising to me, it's not high frequency if it's not high volume, and you open yourself up to larger bid/ask spreads.