This idea that arbitrage can "exploit" anything is non-sense.

I agree. Im not sure what i said that made you think i thought otherwise.

Should traders avoid markets that offer better prices?

of course not. Like i said, i have nothing against arbiters. It would be absurd not to exploit an arbitrage. But markets that are not as responsive, like the internal market, should not be allowed to drag the price down. And yes, it absolutely is doing so.

Are the bids and asks on the internal market not real?

Of course they are real. However, the abriters are effectively selling the same X steem over and over again. So for example, lets say there are asks for 20K shares steem. Those asks will all be filled by the same arbiter selling 1000 shares 20 times. The same would be true if there were asks for 100K shares. NO matter what, thearbiters will fill asks by selling the same shares over and over until the sell pressure forces the external market price down to the internal market price.

There are many examples on bittrex and polinex of massive buy volume drivbing the price up, only to be immediately offset by equally massive arbitrage sell pressure setting it back down.

Im not sure if youre intentionally pretending not to understand what im saying, or if im just being unclear (ftr, i'm aware that you do this, so i know you understand what im talking about perfectly well). That said, i do appriciate you coming here and talking about it.. while none of the "powers that be" have done so.