> A heuristic like "only make 1000 trades a minute" could have saved Knight $400 million!

A heuristic like that would not allow Knight to function. Knight is an electronic market-maker (one of the biggest) and is probably making markets in thousands of symbols and likely updates those quotes several times a second. Their normal quoting rate is on the order of millions of messages/minute and in volatile times may spike 10x or more and still be within 'normal' limits.