Of course, Bitcoin is a currency, Therefore it's being used for illegal activity and that's a given, even USD is being used for illegal activity as well as any currency in the world... The fault is on the one using it for illegal activity not the currency.
We can not punish bitcoin when bitcoin used for illegal activities. Bitcoin depends from how the user of bitcoin use it and treat bitcoin for.
I think the fault is on the user dude, i couldn't agree more with you.