Hmm, I think, you, guys, misunderstood the issue slightly.
There is no problem in illegality of data stored on your computer.
Having child pornography on your computer is by itself a reason to have you arrested with a felony, get labeled a child sex offender with a legal requirement to constantly register as such (a highly controversial issue in itself), and face a significant loss of both liberty and property if you are found with the content on your computer. It is a huge issue and something to be concerned about as you are essentially found guilty until you prove yourself innocent with a great deal of effort and money when the issue comes up.
Yes, I know that is not how the judicial system is advertised to work, but it is current reality. Those pushing against child exploitation in various aspects are now found in high public office, and being "strong against child predators" is an easy way for a democratically elected official to get into office. How do you run against that kind of platform? "I want to protect the rights of mislabeled child sex offenders" isn't a good sound bite and makes you look soft on crime, where the easy thing is to let a few people go to jail who might be innocent of the charges in exchange for getting most of the "bad people" off the streets (however that is labeled). Most juries also don't buy "I didn't know that stuff was on my hard drive".
As I said, guilty until proven innocent.
For a chilling example of how the judicial system can really screw you over on this issue, I'd suggest you look at this video:
http://www.pbs.org/wgbh/pages/frontline/the-confessions/?utm_campaign=viewpage&utm_medium=grid&utm_source=gridRaising the issue is certainly useful, and the concerned expressed that somehow data could be put onto your computer inadvertently is something of grave concern if you are worried about such things. There have also been more than a few people dragged into court for other peer to peer software applications, which is one of the reasons why you see even formal legislation outlawing even the raw practice of writing peer to peer software in the first place, of course forgetting that what these legislators are essentially doing is outlawing the internet as a whole.
There are clueless legislators out there. Raising issues like this is therefore something that I think is legitimate. Also, bad PR can also result in criminalization of something like Bitcoins, which is something I think everybody here would love to avoid. The use of pornography as a vector to shut down Bitcoins seems like something to generally avoid if possible.
My hope is that Bitcoins become widespread enough by the time some of these other ways to exploit the software are tried and noticed by law enforcement that the prosecutors will go after the people who decide to put this data onto the network rather than those who are running the network. That may not be easy to determine, but is to me a much better way to run such an investigation. Unfortunately the easy solution would be to simply shut down Bitcoins as a whole without even seeing other applications.
