"We" aren't funding anything. We (401k owners) benefit minutely from the reduced friction, but it doesn't cost us anything; if hedge fund A gets their latency down to 1ms and so they get our buy/sell rather than hedge fund B that's running at 5ms, so what? It's not like A charges us any more than B did, and why should I care whether A or B gets the profit?
What's happening is commoditization, which you should be happy about - the only value the HFTs are destroying is their own profits. It's just like if PC maker A can sell hard drives 5 cents cheaper than PC maker B by building a faster robot - sure, I didn't really care whether my hard drive was $120 or $120.05, but I don't lose anything - why do I care whether A or B gets the profit?
What's happening is commoditization, which you should be happy about - the only value the HFTs are destroying is their own profits. It's just like if PC maker A can sell hard drives 5 cents cheaper than PC maker B by building a faster robot - sure, I didn't really care whether my hard drive was $120 or $120.05, but I don't lose anything - why do I care whether A or B gets the profit?