Not every country declared bitcoin as illegal some countries did so. I think major reason for declaring bitcoin illegal is Taxes, Banks and Scammers. It will hard for government to get tax from bitcoin users. It hard for government to categorize bitcoin for their taxation whether it would be on a passive income or not because BTC is also a currency. That's why its better for them to ban it. Bitcoin will effect Banks people will exchange many without using them. Scammers doing fraud which is also a thread for people and it is hard for government to stop them.