Yes, there is a net zero position, however, this process also drives the price - downwards in the case of shorting.
As this happens, others are FORCED to sell as stop losses are triggered and margin calls are made. This in turn provides more shares for sale at a lower price and thereby allows the sneaky buggers to accumulate at an artificially created discount. All they have to do then is wait for the recovery. The shorted shares have a net zero outcome, but the additional accumulated shares grow in value and provide $$$.
Also, when stops are triggered and margin calls are made, they have more shares at a lower price to cover, so another manipulated money making mechanism.
If they know where the stops are (which I'm sure they do if they are so intrinsically linked to the lending etc), then it only gives them another advantage.
If I knew there was 1m shares to be stopped out at say $2, why wouldn't I short 1m shares to get the price down to there, knowing full well that I'll have the volume to cover when I get the price there?!?!?!
If shorting was simply a "side bet" that the price will drop, then that would be different, but the fact that it forces additional sell volume along the way is what makes it dirty dirty dirty imo!