yes it is good in many scenarios.

Imagine bad (incorrect and potentially harmful) information is public knowledge. Examples are "X cures cancer" or "Is Y dangerous to consume".

A prediction market will be seeded by public knowledge (of course it cures cancer or its safe to consume), which you describe "suckers". History is filled with many examples of bad public knowledge that turned out to be false (e.g. DDT is safe pesticide).

An insider (someone who knows the drug trial results, or works at the Corp creating the harmful substance) is incentivized to trade on that knowledge, which creates a better informed public (via people who pay attention to prediction markets).

Why does secret(insider) knowledge exist? To the benefit of the organization that wants to keep the knowledge secret. Insider trading laws purpose is to keep Corp and gov orgs in power. They prevent the dissemination of true information (for private power). Prediction markets incentivize the dissemination of true information, a public good.