I'd say that either you know almost nothing about the Cult of the Dead Cow and made it up, or you know a lot about them and felt the need to trash them for their politics. You paint a frightening picture of their capabilities--cybernetic weapons of mass destruction and virtual mushroom clouds--but you're ignoring their motivations.

They're political, and anti-government/anti-authoritarian (no wonder you want to trash them!). A lot of the tools they distribute are designed to promote privacy and defeat censorship (like Torpark). They've also developed anonymizing proxies, peer-to-peer encrypted chat, and other personal privacy tools. They coined the term "hacktivism" to describe activities such as working with Chinese dissidents to set them up with secure communications. Their famous "Back Orifice" tool for penetrating Microsoft Windows security was motivated by a desire to shine a spotlight on Microsoft's crappy security and to try and embarrass them into improving it.

They've been among the most vocal critics of Google, Yahoo, Microsoft, et al, cooperating with authoritarian regimes to censor Internet searches. This is their brainchild:

Like any tools, their tools can be, and have been, abused by the bad guys. I suspect that they're happy to turn a blind eye to it, because as a variety of anarchists they want to "monkey wrench the system". They're extremist, and sometimes at the extremes they do harm, so I wouldn't go so far as to defend them. But there's more to the Cult of the Dead Cow than their capabilities and your fearmongering--you kind of sounded like Dubya, there, Techie, describing how "they jes wanna break things". But as with Dubya's simplistic aphorisms about terrorists, there's more too to the CDC.

Wikipedia article