Something is valuable because someone else also believes it has value. Have you considered that people put their money in Bitcoin to avoid it being stolen by nefarious/oppressive governments or to hedge against inflation or as speculative investment that Bitcoin will offer additional use cases in the future? Those all seem like legitimate use cases to me.

I don't disagree that it's an underground economy, but that's only because it hasn't hit the mainstream. But being underground doesn't necessarily mean nefarious or illegal. Those bad actors definitely exist in the Bitcoin economy and all other economies. But without some data I'm having trouble coming around to the idea that the majority of Bitcoin is used for illegal purposes.