Your analogy would only make sense if Tornado Cash (Puppy Kicker 3000) was created for the purpose of money laundering (kicking puppies), but it seems like it was created for consumer privacy reasons.
Take a million dollars and buy something with it. Even just depositing 10k in a bank account gets reported to the feds, and possibly investigated (And using lower amounts is illegal under structuring.)
That's setting aside the instances of civil asset forfeiture where money is seized because driving with large amounts of cash is assumed to be the product of a crime.
So yeah, whether it's a good policy or not, it definitely seems to be the view.