Bitcoinica was a very important platform and the Bitcoin world took a serious hit now that it is gone.
It's true that day-traders add price stability and depth, which is beneficial to everyone involved in Bitcoin. But that's not the only thing Bitcoinica did.
Let's start with short-selling. People think of it as a speculative bet (against the currency), and it can be that. But it can also be the opposite - it can be used as a hedge to avoid speculating. Suppose a service takes Bitcoin payments and pays with bitcoins, but in between it doesn't want to be exposed to currency risk. They will need some Bitcoin reserve to operate smoothly, and they can lose if those bitcoins decrease in value. With a margin trading platform, they can take a short position that exactly negates the bitcoins they're holding at the time. This way they have bitcoins to use but don't care at all what the price will do.
They don't need to want a neutral position necessarily. Personally my overall BTC position is long, but within reason; and I have use for more bitcoins than my position. So I bought bitcoins on one hand, and took a short position on Bitcoinica on the other; this way I had bitcoins available to be used, but with not as much risk.
Even when short-selling and leveraged buying are used speculatively, it can be as a long-term investments. People who don't believe the current Bitcoin price is justified can signal this with a short position; this helps prevent bubbles as the one we saw in June 2011. People who do believe in the future growth of Bitcoin can take a leveraged long position; this allows more money to enter the Bitcoin economy, which eventually finds its way to the establishment of new Bitcoin businesses.
Put differently, even if Bitcoinica is a "zero-sum game", it's a game where value flows from the wrong people to the right people. If Bitcoin needs to succeed, the platform moves money from the people who don't understand it to the visionary people who can use the money to further build it; if Bitcoin needs to fail, the platform moves money from the crazy people who are obsessed with it to more reasonable people who will use the funds to create actually necessary businesses. So whatever the fate of Bitcoin is, margin trading (and other "speculative" instruments) are a net positive for the world.
+1
Short selling for hedging purposes is a pillar of mature markets.
I can't even mention 'short selling' to most people without their giving me a pavlovian 'evil speculators' response.
Naked short selling? That's different.
The persistent high levels of theoretical spatial arbitrage I see in the bitcoin market reflects both the immaturity of bitcoin as well as the need for short-selling to hedge against currency risk.
Market risk is a no brainer and especially interesting considering the irreversibility of bitcoin transactions.
I would love to see data showing what percentage of new coins miners keep for themselves, so as to further understand currency risk vis-a-vis operational risk.
Moreover, there's so much potential for bitcoin to transform traditional finance.
Traditional finance is deeply flawed and desperately needs this transformation.