Those who argue that there would have not been a rally to begin with (i.e. without leveraging) are kidding themselves.
Here's my stance on the leverage debate.
Momentum is the biggest part of any price movement. You can see this very clearly in the charts... the big trends last for months. If we had not had leverage, we would have had a slower rise (and perhaps even from a lower bottom), but the price would have kept rising instead of running into a brick wall. We definitely could have gotten past $7 without Bitcoinica.
I've said it before, but with Bitcoin if you're smart enough it's relatively easy to "beat the market."
This isn't the stock market. There's countless fewer variables to consider and as such it's infinitely easier to isolate market variables. This also means that the variables you can isolate have a much more deterministic impact on the market. Deconstructing the Bitcoin market compared to the stock market is like someone asking you to guess the number of jellybeans in a jar vs. the number of jellybeans in a swimming pool just by glancing at them.
The ONLY time I've gotten somewhat fucked was a few weeks ago when everything snowballed on Bitcoinica. Why did I get fucked? I wasn't even aware that the asterisk could be an issue. Well, it's turned out to be a huge issue. The downward movement today was completely expected and that's why I didn't lose anything. But seriously, Bitcoinica's gotta figure out its reserve issues.
The Bitcoin market is a system. All systems need homeostasis to stabilize, and that means balancing systemic input and output. Bitcoinica really fucks with the input and output.