That last point is a real brain-wrinkler.

It's part of the broad, hand-wavey, vague answer to your "Who exactly does this hurt?" question.

Fiat systems are full of distortions, which means they're subsidizing people who are good at recognizing distortions. These are very smart people doing somewhat unproductive work (they're filling in the unnecessary holes dug by the state). In one sense, they might even be making things worse in the long-run, by mitigating the economic damages of the state (people might abandon statism if they actually observed how bad it is).

This is related to what I think about most, when politicians talk about "Draining the Swamp." There are lots of very smart people who take non-productive jobs with the state and they would all be put to productive use, if those jobs were abolished.