The project was originally started by the Office of Naval Research. Really, it's the perfect vehicle for electronic espionage: hide your tracks as an intelligence agent on an anonymity network primarily occupied by ordinary citizens.

More details here: https://www.torproject.org/about/torusers.html.en#military

I think not only Tor, but many other encryption/anonymizing tools will face risk of being outlawed. I can imagine many situations in which the work of intelligence agencies will become more difficult.

Along with that a conundrum will be created, since such tools are used by Chinese citizens to bypass their governmental firewalls, by people in the middle east to bypass similar types of blockages among others, etc.