So crypto currencies don't work without a working legal system to back it up? Why the hassle with ever increasing transaction logs, and decentralization with all its drawbacks then?

what are you talking about? the concept of ownership exists outside of any legal system. legal system is there to have a recourse if your ownership rights were infringed upon, regardless of whether it was gold or bitcoin or sheep.

They work with and without a legal system, and you can still steal them. When I know you stole my bitcoins, I won't go through the legal system either ;D