What you say is right to a point. However some fine companies have been destroyed by naked shorting by black boxes. They take unusual risks based upon momemtum and often without the assets to take them through should they reverse. This is similiar to what happened to some hedge funds when they were over leveraged and got caught holding the bag on CDO's.

If the exchanges would police and punish illegal shorts it might be a level playing field. Now when they are forced to look at them they give them a slap on the wrist.