It's primary design is to allow you to emulate a CDRom off of an ISO image.
In a court of law, there are more than enough legal uses for such a product that you could never get an accusation that it is primarily for pirating to stick.
Ironically, if I'm using Daemon Tools to negate copy protection on the disc, it's likely that I also have access to cracks that can bypass the copyright protection that is designed to prevent me from bypassing the copyright protection.
The solution to all the copy-protection crap like Starforce is to have knowledgeable, charismatic people skilled in both technology and the law fight against this and establish laws that prevent the equivalent of root kits from being installed on an individual's computer. Two or three laws passed, or two or three strategic court cases would make this crap a thing of the past.