This question is quite broad and subjective so is probably best reformulated to be slightly more specific, but in general a more liquid, more active market is better for everyone since;
- prices become more transparent helping those with lesser specialist knowledge.
- pricing from market makers is usually more competitive and cheaper, since they have better cumulative knowledge and expectation of cheaper hedges in tandem.
Your comment about a lack of arbitrage opportunities is not correct. Markets are zero sum games, where one party can profit another party inherently loses, either directly or indirectly, and a genuine arbitrage opportunity represents one party gaining at the genuine expense of another through nothing more than systematic misunderstanding of pricing. By creating price transparency and competing for any arbitrage opportunities that do appear, hedge funds are one factor that contributes to the result of arbitrage occurring less often and to lesser effect. Which is arguably more fair on those who stood to lose.