Someone who wants to buy or sell goes to a market in order execute at the best price achievable, and they may be under time pressure.
If the spreads are wider at one place than another, participants will gravitate to the place with the narrower spreads. If there is better liquidity at one place than another, activity will move to that place.
The purpose of being at the market is that you want to trade.
These qualities that you dismiss, "a mild inconvenience at worst", are the essence and measure of a market's effectiveness.
"A tight spread just means that somebody is getting rich by taking that choice away from me and everyone else on the exchange."
No, it is the opposite of that. It is when spreads are wide that there is easy opportunity for getting rich. Consider: it is more lucrative to buy from one person at 10 and sell to another at 20 then to buy from one at 15.01 and selling to another at 15.02.
"You get to choose between waiting for a better deal and taking a worse deal immediately"
That is not the choice. On a good market you get both a competitive price, and you get to deal immediately.
An order that you rest on the book is called a limit order. You can do limit orders on any market, even those where market makers operate. Creating a market that offers limit orders is easy. The more challenging problem is to create a market where people can come and place market orders that get filled immediately
Four years ago, I wated to sell stock to close a deal to buy a house. I didn't want to sit around for hours or days or weeks or forever tweaking limit orders, hoping the market would move in my direction and that the house would stay on the market. I went to market to execute, got my money, and put down the deposit.
If a company goes to a market to offset risk, they typically want the convenience of getting the deal done immediately. If they have to wait weeks to close the deal, the risk might already have past by the time they could get the deal done. Liquid markets with tight spreads get rid of the workflow and loss of time inherent to haggling whilst giving you justified confidence that you are getting a competitive price.
