Intent of involved parties is already a big part of the legal system and is a major (and sometimes necessary) aspect of many laws[1]. And in my opinion having intent matter is just common sense. It's why torrent clients are perfectly okay despite how easy it is to find torrents of copyrighted material, but Popcorn Time was probably going to have a challenging time in the courts[2].
The way an intent requirement is supposed to work is that there is some evil specified by the law that you are not supposed to do, and the prosecution or the plaintiff has to prove not only that you did it but that you intended to do it.
The problem with cases like this or Grokster is that it's the reverse of that. If you intended to get the same result as the prohibited thing then whatever it is you actually did is retroactively defined as the offense. It's thoughtcrime. You were thinking "bad thoughts" when you did something, therefore whatever it is you did is prohibited.
The consequences of that are all kinds of stupid. On the one hand it means that everybody has to hire lawyers and censor their employees to make sure nobody says anything that could retroactively cause their actions to be interpreted as unlawful by providing evidence of intent. It's completely pointless for BitTorrent to be OK while Popcorn Time isn't. Popcorn Time is essentially BitTorrent with a different logo. If you can't shut down BitTorrent then being able to shut down Popcorn Time will cause a zero percent reduction in piracy.
Meanwhile for all the language about not wanting to discourage innovation, how is that not the only possible result of this? You might as well post a sign that says "technological solutions to legal problems are prohibited." And technological solutions to legal problems are great, because legal problems are problems and technological solutions are solutions.
Right. The question asked is "Does the technology have substantial non-infringing use?". In the "Betamax case" [1] it was ruled that using VCR's for time shifting was fair use, even though a VCR could be used to illegally copy and distribute content. It had substantial non-infringing use. Bittorrent has substantial non-infringing use, so it is not illegal, though it also has illegal utility.
[1] http://en.wikipedia.org/wiki/Mens_rea
[2] http://getpopcornti.me/