From: someone
the highest dollar wins
The problem is with the auction system and the rapidly growing population of SL, not with speculators. Auctions are designed to put the goods in the hands of the people willing to pay the most.
If somebody buys the land with no intention other than selling ("Land Baron"

, then they will sell it eventually, even if they have to take a loss. I think a lot of these speculators are going to start losing money real soon now, and will go to other pursuits. Then we won't have so many Land Barons to kick around.
But let's say that someone does buy the land for re-sale, and then sells at a profit. Who bought it from them? And where was that person when the original auction was going on? If the second buyer (the final owner) had been present at the auction, they surely would have been the winner, no?
So the speculator is effectively acting as a proxy for the eventual buyer. The buyer does pay more than he would have at auction, but he is the only one that pays that price, and it is his decision (it is effectively a fee for the service that the speculator provided). The buyer always has the option of continuing to look or getting in on another auction. Maybe he just doesn't like auctions.
Now the fact is that the fewer people that are present at an auction, the less the land will sell for. The more people that are there (on balance) the more the land will sell for.
But an auction where there are only a few people (when the population of SL is growing by leaps and bounds) sounds to me like the people who happen to know about an auction taking advantage of everybody else who doesn't. Low prices at the expense of the majority of people who weren't there.
These "Land Barons" allow people to (in effect) retroactively participate in auctions that they missed, resulting in more and fairer access to the auction system. Higher prices, of course, but that is the natural consequence of more people being at the auctions.
However, there is another way that Linden Labs could set things up that has occasionally been mentioned: no up-front fee at all for land. Everyone gets in line with their land requests, which are dealt with first-come-first-served, and there is no charge other than the tier fees.
To my mind this other way of doing things would be a disaster: it would be a huge chunk taken out of the economy and just discarded (some people think the less economy the better, of course, and some even want to see in-world currency eliminated completely).
But the economy here is a Good Thing. When our economy is strong enough that some people can pay their rent and buy groceries after cashing out a month's Linden dollar earnings, then you will see a huge leap forward in the quality and quantity of content that are created here.
I'm looking forward to it.