There is an interesting post on Cryptome, TOR Made for USG Open Source Spying Says Maker, in which one of Tor's creators, Michael Reed, says to look at why the government created Tor from a common sense point-of-view instead of as conspiracy theory.
The Tor Project is free software that lets people be anonymous online but it's not an invisibility cloak that's meant to protect privacy. People use Tor to be anonymous for all kinds of different reasons, from regular users, to journalists, dissidents, whistleblowers, corporations, overseas military field agents, and even law enforcement to list out a few. Surfing with Tor is supposed to anonymize traffic; in the same way that Tor can keep your IP from showing up on a web log, it can keep a government or law enforcement IP address from showing up on web logs during online surveillance.
The TorFAQ clearly states that exit nodes can eavesdrop. "Yes, the guy running the exit node can read the bytes that come in and out there. Tor anonymizes the origin of your traffic, and it makes sure to encrypt everything inside the Tor network, but it does not magically encrypt all traffic throughout the internet."
The discussion started on tor-talk about Iran cracking down on "web dissident technology." The question was raised about why the government would create and continue to fund a technology like Tor that could be used against them. It was then answered that people should take a common sense approach, instead of a conspiracy theory, to realize the most effective way for the government to anonymize its Net communications is to make Tor available to anyone and everyone. An anonymity network used only the government would not work.
When Michael Reed, one of the original developers of the onion routing program, responded to the thread, he wrote:
BINGO, we have a winner! The original *QUESTION* posed that led to the invention of Onion Routing was, "Can we build a system that allows for bi-directional communications over the Internet where the source and destination cannot be determined by a mid-point?" The *PURPOSE* was for DoD / Intelligence usage (open source intelligence gathering, covering of forward deployed assets, whatever). Not helping dissidents in repressive countries. Not assisting criminals in covering their electronic tracks. Not helping bit-torrent users avoid MPAA/RIAA prosecution. Not giving a 10 year old a way to bypass an anti-porn filter. Of course, we knew those would be other unavoidable uses for the technology, but that was immaterial to the problem at hand we were trying to solve (and if those uses were going to give us more cover traffic to better hide what we wanted to use the network for, all the better...I once told a flag officer that much to his chagrin).
Then the EFF was brought into the mix and EFF's Senior Staff Technologist Seth Schoen pointed out military uses for Tor are listed on the "About Tor" page. In fact, at the very top of the page, it states that the Naval Research Laboratory originally developed the onion routing program "for the primary purpose of protecting government communications."
Just as the Internet was originally developed by DARPA for military communication, people who follow Tor probably knew that the onion router was started by the military. But it was gutsy of Reed to be so plain-spoken for those who didn't know it. Also posted on Cryptome, John Young wrote, "Claiming this US spying role for Tor is well known is a crock of slop, but then spies lie all the time..." There's more but I won't quote it here because of the foul language.
It has been reported and has also been denied that WikiLeaks "was launched with documents intercepted from Tor." Julian Assange recently told students at Cambridge the Internet is "not a technology that favors freedom of speech" or "human rights." He added, "Rather it is a technology that can be used to set up a totalitarian spying regime, the likes of which we have never seen."
If the government wants us to use Tor, does that make it bad thing? No. Tor can be used by good guys as well as by bad guys. Tor's not perfect, but I still think the more people who use Tor as an anonymity tool, the better for everyone. If you want anonymity and privacy, the best thing to do is to encrypt.
I highly recommend going to Cryptome and reading more and well as checking out the tor-talk thread for March.