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/Sony_Corp._of_America_v._Univer....