The law doesnt need to compell the computer code, it can force people to do things, it can force the code to be rewritten, it can shut down servers that run the code, it can confiscate the money used in the processes.

The idea of the blockchain is that there no single server that runs the code and that could be attacked that way.

A lot of de jure illegal transactions happened on the bitcoin blockchain without a court confiscating the transactions. When MtGox was hacked they couldn't simply ask a court to confiscate the Bitcoins that the hacker stole.

There are a lot of drugs sold via Bitcoin and the courts also don't confiscate those.

If people make a bet in Augur that the US government doesn't like, the US government can't shut down Augur. At least that's the idea on which Ethereum and Augur are build.

Augur can trade a market about whether a certain drug will get FDA approval and the market participants are anonymous. That means they can use insider information. It's impossible to backup that anonymous transaction with standard contracts but smart contracts can.