I guess I'm more thinking long-term that if their (non-direct) competitors are lowering their margins those business models are now worse off. Thus, those retail brokers will have less money to invest in themselves and a long, drawn out price war could be the demise of some of the retail brokers.
Me saying retail brokers cutting their prices "can only help IB" was probably a stretch. You're absolutely right that equity pricing (don't forget their massive advantage in options) is a major advantage of theirs and closing that gap isn't a good thing, at least on the surface. But IB makes the vast majority of their money off active, professional traders who (should) care a lot more about pricing than customer service. Again, I think the type of person who would have gone to IB, but who will now go to a retail broker because of the $2/trade decrease is an absolute fringe case and one that we'll never even notice in IB's financials.