Completely outrageous. You sell a stock - you lose 0.1% of the total value, then you but a stock losing another 0.1% of the total value for 0.2% on each round-trip. Then you pay SEC taxes on each sale, and capital gains if you somehow make a profit. Frequent traders cannot sustain this level of taxation and will go away. That is enough to dry up market liquidity.
The frequent traders won't go away, but the bigger fish will be taking it over. This is another way to help drive the smaller fish out while raising more money for Fedzilla.