While bitcoins can be used for illegal transactions, it does not mean (and never will) that 99% of transactions will be illegal, just like Feds won't shut down knife factory because some knifes were used to kill. At the end, paying for something illegal is not illegal on its own; its the act or good you paying for illegal. So this or another way, in order to sentence someone, Feds will need more proof of a comited crime, than just blunt bitcoins transactions (how about crime itself).
Did you declare all your bitcoin transactions to the IRS? You may already be in trouble...
That doesn't mean it isn't 99% illegal activity, just like e.g. Freenet.
I cargo-culted that explanation, but it sounds good to me.