That's not true, because the idea that Knight's mispurchases were zero-sum isn't correct either.
All business enterprises, including stock trading, only operate when their returns can exceed the discount rate of the market [1]. This means that overall, the returns of all players in the stock market will tend to exceed 4-5% on average, and on a time-averaged basis. As a result, the S&P 500 has tended to yield an average return of 5% over the last decades [2]; it was higher before that when markets were younger.
What this means is that the stock market isn't zero-sum, but via the EMH, adds value to the economy. The first question you'll probably ask is, but how? The answer is that returns are made by making prices for assets, in this case stocks and other securities, more accurate. When the market has accurate prices it functions more smoothly [3], and this smoothness is attributed to stock investors, who make a profit from doing it.
This means that the market is benefited when prices are made more accurate--that is, when companies make profitable stock purchasing decisions. It's harmed when companies make unprofitable decisions. While other companies will buy Knight's errant stocks, their profits will ideally be less than Knight's loss, due to frictional costs. Goldman is just making a marginal profit on these purchases; Knight is taking a $440 million loss. Goldman isn't going to make $440 million on reselling Knight stock. This difference means that the transactions should ideally be a net loss to the market overall, because they were purchased in error and the time integral in the deviations caused in the affected stock prices is the factor by which the broader economy is harmed.
But yes, when the market functions correctly, it creates wealth by making prices accurate (price discovery [4]). When it functions incorrectly, a la Knight capital, prices are distorted and wealth (in this case the value of correct prices) is eliminated.
Like any trader, when they buy higher than anyone else, or sell lower the counterpartiess to that trade benefits by the margin. The fact they are trading also adds liquidity to the market, making it easier and cheaper for other traders to take and close positions more quickly than they otherwise could.
