He is careful to distinguish market-making/liquidity providing functions from the multi-market latency arbitrage
I don't think the distinction is as clear as you think. If I'm making markets on several of the US equity exchanges, and I see my entire order on one side of the market at one exchange get taken, I will adjust my quotes at the other exchanges. That's not front running. It's a reasonable market making strategy.
The argument from IEX is that the exchanges intentionally price trades using slower data than what they (the exchanges) have access to. We can call it whatever we want, but natural traders would prefer an exchange that doesn't price match in this way, and have every right to move to such an exchange.
Natural large volume traders prefer an exchange that doesn't price match this way. No one is preventing them from creating a dark pool (which is what IEX is) and they already have any number of dark pools available for this sort of trading.
Turns out many natural traders (Vanguard is the one that comes first to mind). Really like trading in the new HFT world as it is way cheaper than it used to be.
Vanguard is in the business of selling index funds. It's Vanguard's incentive for mutual funds and hedge funds to face unnecessary taxes on their trades. This lowers the returns of active investing versus passive investing. What's bad for everyone else is good for Vanguard.
It's true that IEX is a dark pool, and that other dark pools exist that purport to favor natural traders, but IEX is moving toward an ECN and full-fledged exchange in a staged launch. Other dark pools are highly conflicted, lack transparency, lack technical protections, and the biggest difference is that people seem to trust the principals of IEX and the incentives of the ownership structure.
I don't think the distinction is as clear as you think. If I'm making markets on several of the US equity exchanges, and I see my entire order on one side of the market at one exchange get taken, I will adjust my quotes at the other exchanges. That's not front running. It's a reasonable market making strategy.