It would certainly reduce liquidity and increase spreads, but I think that's the point. Stocks are not supposed to be a terribly liquid instrument, yet volume continues to outpace growth in the market. It's true that trading in Sweden basically moved to London when they tried this, which is part of why now you're seeing a push against this unless the entire EU hops on board, or even the entire world (however it will not happen in New York in a million years).

There are lessons to be learned from Sweden's experience, but I'm not sure you can necessarily point to as a definitive case study and say "See? It won't work."