I'm pretty libertarian, but I agree these should be stopped. As the other poster said, it gives real estate closer to the market servers an advantage, I'm not quite clear how it works, but it is evident that it does because people are doing it. I assume they can recognize short term patterns and jump in ahead of anyone else who might try to take advantage of them.
When a buyer or seller places a limit order, their limit price is supposed to be a secret, and the market is supposed to deliver the best possible price for them relative to that limit. Flash trades and "immediate-or-cancel" orders allows high frequency traders to issue a flurry of really quick orders to discover a slower trader's limit price, and then trade at that limit instead of the price that the slower guy would have otherwise gotten.
So if ACME is trading at $26.10, slow buyer A enters a limit buy order for $26.40, and slow seller B enters a market sell order, the high speed trader is able to use really fast trades to discover A's $26.40 limit, buy B's shares at $26.10, and then sell them right away to A for $26.40, all before A can learn about B's more favorable sell offer and accept it.