How can this be true consistent with HFT being profitable?

> The faster the trading, the lower the spread, the smaller the leap sellers and buyers have to take.

That's the theory. The issue is that when you get into sub-millisecond trades, you're so far into diminishing returns that the profits the HFTers are taking exceed the benefit of any theoretical increase in liquidity.

Also, the paper link in that post is truncated, but I found it on Google and (at least from the abstract) it doesn't seem to support what you're saying. The paper says HFT has caused spreads to go down because in order to mitigate its effects, third parties are breaking larger trades into smaller ones. But that only reduces the spread on paper by increasing the number of transactions.