If his illegal activity draws any heat, they will seize every computer in the house while they try to figure out whodunnit. Do you have anything on your computer that could incriminate you in any way? Are you sure? If not, and you do manage to avoid federal prosecution, you still might not ever get your stuff back.

it would almost certainly turn into a supercomputer of sorts by allowing for the growth of a massive botnet.

From an article I read some years ago about the 6 real societal functions of modern education:

1. 1) The adjustive or adaptive function. Schools are to establish fixed habits of reaction to authority. This, of course, precludes critical judgment completely. It also pretty much destroys the idea that useful or interesting material should be taught, because you can't test for reflexive obedience until you know whether you can make kids learn, and do, foolish and boring things.
2. 2) The integrating function. This might well be called "the conformity function," because its intention is to make children as alike as possible. People who conform are predictable, and this is of great use to those who wish to harness and manipulate a large labor force.
3. 3) The diagnostic and directive function. School is meant to determine each student's proper social role. This is done by logging evidence mathematically and anecdotally on cumulative records. As in "your permanent record." Yes, you do have one.
4. 4) The differentiating function. Once their social role has been "diagnosed," children are to be sorted by role and trained only so far as their destination in the social machine merits - and not one step further. So much for making kids their personal best.
5. 5) The selective function. This refers not to human choice at all but to Darwin's theory of natural selection as applied to what he called "the favored races." In short, the idea is to help things along by consciously attempting to improve the breeding stock. Schools are meant to tag the unfit - with poor grades, remedial placement, and other punishments - clearly enough that their peers will accept them as inferior and effectively bar them from the reproductive sweepstakes. That's what all those little humiliations from first grade onward were intended to do: wash the dirt down the drain.
6. 6) The propaedeutic function. The societal system implied by these rules will require an elite group of caretakers. To that end, a small fraction of the kids will quietly be taught how to manage this continuing project, how to watch over and control a population deliberately dumbed down and declawed in order that government might proceed unchallenged and corporations might never want for obedient labor.

After Blaster happened, I wanted to find out who was responsible for the buffer overflow that was exploited and hold the individual accountable.

How about not generating an organizational culture of fear? Anyone who has taken an introductory psychology/behavioral theory course knows that while the threat of punishment works as a deterrent to deviant behavior (like letting bugs slip through the cracks out of laziness/apathy) some of the time, the promise of a reward for doing things right is much more effective.

If I were a Microsoft executive charged with the task of elevating security standards, I would institute some kind of incentive system for secure code. None of your team's applications required a Tuesday patch this month? Here's a check. You found a vulnerability of which we were previously unaware? Here's a bigger check. Keep up the good work, valued one!