Who is 'they' ?

And what do you mean by 'illegal stuff'? Illegal according to whom? OpenBazaar is not operated from or associated with any country, region, or geographical location. Thus, there is no country or jurisdiction in particular whose laws apply. Therefore the whole concept of 'legal' vs 'illegal' loses its meaning entirely within the context of OpenBazaar, it's simply not involved here.

I seriously doubt that. Does the Euro or US Dollar's reputation suffer from the fact that billions worth of drugs and weapons are being purchased with it?

Besides, who cares if someone else is selling 'illegal' (according to your own subjective notion of 'illegal') stuff on the same platform. Simply don't buy that sort of stuff, and everybody's happy. Win-win!