Maybe Silk Road has an item you haven't been able to find on other sites. It's an auction site, like eBay, like Craigslist. Does everyone who posts an item they have for sale on one site also post it on every other site? No.

I'm not libertarian, so I'm not sure why that's coming into the discussion.

why not just start another one that 100% legit and more efficient?

I don't think that's possible, because of the aforementioned fact that users vary. You can't create one auction site, present it as "perfect" or at least "more efficient" and expect everyone to hop over just for that. eBay and SilkRoad both allow users to be rated based on their effectiveness and the quality of their merchandise. Perfectly legitimate users from both sites aren't going to be willing to throw away reputations they've spent years building.

Also, eBay's been used for nefarious purposes as well. Or if not nefarious at least unsavory, like selling girl's virginities. So we are just supposed to build a website and expect/require that all users keep all transactions above board? That's not enforceable/policeable. That's exactly why websites aren't held accountable for what's posted in their comments section/in their threads (although they can be held socially accountable, as occurred with Reddit and r/jailbait). There is an extent to which something can be policed but you can't monitor for 100% legality 100% of the time, you have to depend on your users. And let's face it; 100% of humanity is not going to abide by the law.

Hell, Kinder Eggs are illegal to ship/have in the U.S.