It is weird how supposedly techno-savvy people can't spot how easy this would be. But I'd think it would look more like an alternative to murder-for-hire when ruining someone else's life and throwing them in jail would be sufficient. Get someone else to pay reasonably big money to actually do it and not just threaten it.
This may have happened already and some middle aged dude caught with CSAM is crying about how he's been framed--only he really has been framed. But nobody believes him, because nobody believes a sex pervert.
It seems like a great way to me to put out a 'hit' on someone because it can be done from across the world without leaving any physical traces, with the actions taken across national borders, and much less likelihood of the cops being able to do anything about it, even if they do detect it and the person winds up going free.
Agencies like the CIA may also be able to exploit this against foreign politicians and public figures they don't like.