Legalizing insider trading would allow the upper 2% to have even more advantage over everyone else. By giving the very rich the means to hoarde even more of our resources by telling one another insider information would create even more economic disparity and cause the economic crisis to get worse. We need to find ways to distribute wealth more evenly, not allow a few people to secure even more of a finite resource.
Not only is the legalization of insider trading very Hypocritical and just plains sends the wrong message. It makes people loose hope in the overall economic system. It is saying no matter how you work, most people will never have a chance to improve their lives. That is because it is all about who you know and not what you know.