At the same time as you're selling your patent to a patent troll, I'm in the process of starting up a company based on my own invention, "continuous transparent wipers". Soon the wipers are selling like hot butter, and we think we might just pull this off. But then, out of the blue, my small company is hit by a lawsuit from the same patent extortionist you dealt with. In fact, they are using the very patent you sold them to sue us. They threaten to take us to court, and though we never even heard of your invention before, it is not clear that there isn't some overlap between our inventions. Our lawyer tells us that we cannot be sure to win, and that the cost of fighting this in court would bankrupt us. So we settle with the patent troll. They only want slightly less than what would kill us.
At the same time, the patent extortionist is using the patent to sue several others who came up with similar-sounding ideas. It's not that the patent extortionist is trying to discourage innovation as such - that's just an unfortunate but acceptable side-effect of its business model. Only people who pay it can be allowed to implement, and thankfully many are willing to give it more ammunition for a quick buck.
So to summarize: People who have a good idea but can't be bothered to turn it into a physical product patent it and sell the patent to a patent troll. It then waits for somebody who actually does invest in their own invention, and then uses the patent to extort them. This is how patent trolls usually work. It is very uncommon for somebody to go looking for a patent that solves some problem, find it in a patent database, and then pay for the privilege of using it. Instead, they come up with a solution on their own, use it to start a successful business, and then are ambushed by a patent they never even heard about.
This de-incentivizes people from going further than the idea step with an invention. When most patent infringements are accidental, it says something about how trivial the patent was in the first place. They are too broad, are granted too easily, and it is too expensive to determine the merit of a patent, and what infringes. It is bad enough that normal companies have them, but at least they have scruples in using them. Patent extortionists have no such inhibitions.
As a closing note: There is, as far as I know, no evidence that patents increase innovation. When patent power is increasd, the rate of innovation does not go up. Similarly, when patents are introduced to a new field where patents were previously not allowed (such as software quite recently), the rate of innovation does not go up. Empirical evidence is not on the side of the patent system. It was well meant, but negative second-order effects turned out to be more important than the positive immediate effects.