shorting - the missing info

Hi

I am still not sure how shorting is meant to be good for us however i am interested in the missing link. No one ever mentions it. Whats in it for the share lender ?

Shorters borrow a portion of the shock from clients or fund managers etc and pay a fee.
So far so good. They then drive down the price and make a profit.
=> How is the person allowing the borrowing better off ?
e.g. lets say 1000 shares at $10 each. Shorter borrows 100 shares say and pays a 2% fee, so $200, drivers price down to $9 say.
Originally 1000 x $10 = 10,000
now funds holdings
1000 x $9 + $200 = 9,200

What am i missing? To me it seems criminal that custodians of peoples money would deliberately be part of someting that drives down the value of the funds they are looking after ?

Cheers