Is "Finance" Justifiable?

Capital markets - Wall Street and all that - are vital for channeling the savings of households into investment by firms, and perform an important function in allocating resources - "capital" - to the most productive uses. But does our financial system do this efficiently, or is there quite a bit of economic rent scooped up along the way (another way of asking this: are investment bankers really paid their marginal products)?
On the op-ed page of the NY Times, Michael Kinsley chronicles the 17 times Avis rent-a-car has been sold or reorganized since its founding in 1946. Makes you wonder... Kinsley writes:

Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. More and more of the news labeled “business” these days is actually about finance, and much of it is mystifying. Even if you can understand — just barely — how it works, you still wonder what the point is and why people who do it need to get paid so much. And you strongly suspect that the swirl of financial activity around Avis for the past six decades has had little or nothing to do with the business of renting cars.