Yes, There are multiple cases in which Bitcoins can be used illegally. Bitcoins bring with it, a notion of anonymity which allows people to transact without revealing their identity. This privilege can be highly misused. However all exchanges in the world mostly are following Anti Money Laundering and Know your customer Policy to avoid any illegal activity by any user of Bitcoins.
Yes and they are people who doesn't have responsibility about the future of bitcoin,
makes bitcoin being bad with money laundering via bitcoin,
bitcoin be used for bad are like crimes and terrorism but doesn't mean we can blame the bitcoin.
Its the same as our fiat money, you can spend bitcoin whatever you want or intend to spend it. Its on the spender's decision. Whether it is a bitcoin, fiat or another else, it is very possible to spend it in illegal means.