I don't know why this economic activity is called illegal? can anyone help answer it? but there is little explanation that currency is not inherently bad or evil, it is only a tool used for transactions and in humans for what it is used for. Like foot if used kicking people will be a crime but if the feet are to run then it's a good thing, ....
The example of the foot does not suit here and crypto currency is entirely a different thing. Why government call it illegal is because they have failed to control it and they will not be able to tax people and regulate the economy if bitcoin becomes the main currency.