Penny pilot is incredible. I started practicing in my sim account with large positions on POT and X options intraday and it really allows for quick large gains with minimal risk.
Besides the conspiracy part, most of what nitro said is dead on. i have personally seen option volume greatly reduced in an etf as it went to pennies. for small retail customers, it's great for them to get in and out. however, i think it has become a disaster for the larger banks and hedge funds. the markets have become less liquid in terms of the size and depth. Options that used to have 5k or 10k on each side of the market now may only have 100. When somebody needs to buy or sell 50k options outright or spreads, there is a lot less size than there used to be. And those orders are harder to fill. The idea that the market place would be better if anybody to be a market maker is absurd. market makers have responsibilities of providing quotes on a large number of options. there is no way mr. joe public can do that. market makers also have restrictions on how wide they can make a market as well. if you don't like the electronic market of the screen, get a quote on the floor where market makers are have tighter restrictions.