You are ignoring the Execution aspect of trading. Thus your comments are wrong on several counts:
" its really only transfer between Wall Street Entities" As others have pointed out, the Wall Street Entities include your pension fund, 401k, etc. So you are very likely to be affected.
"HFT machines may have moved the share price up or down a few pennies. That might just as easily work for your as against you"
This is only true if you can execute at the posted prices. When you want to sell at $2.00 and there's interest to buy at $2.05. HFT will buy it from you at $2.02 and sell it at $2.05, thus pocketing $0.03 that you might have been able to earn. On the return trip, the same thing happens. The round trip does not wash out, otherwise the HFT CANNOT make any money!
' you can protect yourself easily just use limit orders"
This is only partly true. If the market only has 1,000 shares to offer and you want to buy 1,000. The HFT will always be able to buy ahead of you and you may not be able to buy any at all. Thus, you will not be able to buy the dip or sell at a top unless there is enough depth.
While HFT is clearly legal, it is still worth asking how it contributes to the market place or if it's just parasitic.
One SEC proposal to charge for cancelled orders might be appropriate to curb excessive trading if HFT has no added benefits to the market.