If others are willing to pay more, that a signal that more value is created if the resource goes to them rather than to the more price sensitive customers.

This logic falls apart completely when gamblers allocate one trillion to bidding up the price, denying access to the resource to people who are responsibly spending their own money. The ideal world of the imaginary perfect free market never takes into consideration the messiness of the real world, like the fact that people will spend extreme sums of money irrationally. It can take years for this effect to correct, damaging the market severely in the meantime.

Alternatively, the money invested can be rational because it prices out competitors and establishes a monopoly, after which point the monopolist earns their absurd investment back with complete control of the market. This is also bad.