Well its services like 'silk road', and the inevitable money laundering schemes that will eventually catch the eye of the powers that be and compel them to declare the bitcoin network illegal. If we don't moderate and police our own network it will all disappear in smoke, and the profits of everyone involved along with it. Blatantly illegal activity going on will make bitcoin go the way of napster.
Don't moderate the market. Moderate the government to legalize these things.It's as simple as that.