It's not just liquidity. Price discovery helps everyone. The earlier the correct price is discovered, the less we're all screwed when the bubble pops. I think they're rewarded too well for the function they serve but whaddya gonna do.
I do think there are some firms that have the skill to out-perform long term, but then the average is dragged down by ones like the subject of this article.
As for the strategy, that's the idea but all of them market themselves on the returns first and foremost.