1. So at Oanda the price they chart by default is the midpoint price meaning (bid+ask)/2 ?
Yes.
2. I understand that technically there can not be "slippage" by standard definition as retail fx brokers are just bucket shops trading against without passing your trades to the "real forex market". But couldn't the price move between the time you tried to hit the ask with a market buy order and the time they fill it? Couldn't the ask go up in that interval of time and couldn't they fill your market order at that higher ask?
All of this is true, but technically that still isn't "slippage",
per se (I acknowledge that I'm being slightly pedantic).
Doesn't this happen somewhat often and wouldn't 1 pip be a good estimate for that transaction cost?
Maybe - I don't know: it's going to depend on how you trade.
For what it's worth, I think that if you're going to use a counterparty "broker" to trade spot forex, Oanda is about the best, and least dishonest one - so I'm certainly not trying to suggest that you're in the wrong place. (Even if some of their spreads are both a little larger and quite a lot more variable than they used to be.)
But market makers have always taken the other side. I don't see it as necessarily immoral.
Nobody suggested it is. What's immoral (and should be illegal) is being a counterparty market-maker
but deliberately deceiving customers and potential customers by pretending to be a broker.
Industries that don't regulate themselves adequately almost invariably end up having more and more external regulators with bigger and bigger teeth imposed on them by governments responding to public and consumer-group pressure, and that ends up being worse for everyone. The retail spot forex trading industry is a
prime example of this societal phenomenon. And ironically enough the people who complain most about "nanny statism", when this inevitably happens, tend to be the very same people whose behavior caused the problems in the first place.
