Unfortunately bitcoin is often used for illegal activities including terrorism and itt anonimity contributed great deal to that. That is the reason why bitcoin had bad reputation very long time, some even considered it as a criminal currency although every currency in the world could be used for crime.
I think Bitcoin is not used for illegal activities much because if a person adopt bitcoin then he will earn himself without any bad activity like if he start trade or to start any other online job with bitcoin. So then he will not need any other illegal activity for making money.
I think it's pretty naive to think that Bitcoin isn't used much for illegal activities, just look at how much Bitcoins the FBI seized from the old Silk Road and look at how many more of those marketplaces are still operational.
Also, someone using Bitcoin isn't magically going to start making money just by using it. Earning Bitcoin is much like earning regular cash, you need to work hard to do so.