The real problem with MEV is that it distorts the consensus mechanism in weird and unpredictable ways. MEV is essentially free money that could be considered part of the block reward, but it exists at the application layer so it really can’t be accounted for in the consensus protocol incentive design. Application layer logic (“smart contracts”) can move arbitrary value in arbitrary ways, which can create wild volatility from block to block.

A similar problem appears to emerge when Bitcoin’s block reward disappears, as high volatility in block rewards would cause rational miners to behave in suboptimal ways.