For every illegal thing, there is a law. If BTC is illegal, then there should be a law against it, and if there is no such type of law then it is legal. If BTC is legal then there will be no need to ban it.

I think BTC doesn't have consumer protection because in countries where it is banned by the government of that country. So there will be no responsibility of the government if you are cheated by someone.

Yes, It is illegal for someone to hack your BTC wallet because the coin is yours and no one have the access to it without your permission.