I can't tell you why any non-violent crime warrants a custodial sentence. It seems like civil penalties really ought to be enough deterrent and a much better recompense to society.

Who is the victim?

The person who bought the stock you knew was worthless or sold you the stock you knew was gold.

Why is insider trading a crime?

It's an unmanageable market advantage, if we didn't disallow it then people wouldn't play. The people who make the rules benefit from people playing.