Sort-sellers do not drive the market further down than it would otherwise go - but they do speed up the response of the markets to events, by trading faster than many other participants. The uptick rules says that you may only enter a short position if your sale occurs at a price higher than the ruling price by a certain threshold. The stated intention is that it stops a horde of short-sellers from climbing in in an instant and causing a one-way drop in the price, without any upticks. The research that they did before abolishing the rule previously, was that it was ineffective, and in fact increases volatility by removing liquidity from the market. No-one has claimed to refute this research, so there can be no reasonable basis for re-instating the rule. As a conspiracy theorist, I believe that the discussions regarding reinstating the rule might be an attempt to trigger / prolong a short squeeze for profit. The short-sellers are also a politically-convenient scapegoat - no-one likes those who profit from others' misfortune, so lets create the impression that it's them who brought down the financial system. (And we hope that no-one notices the regulatory failures...)
