I may be a bit naive on the subject, so bear with me.
I know that hackers can use a botnet as a proxy to hide their IP, but there are ways to discover their IP when the traffic is intercepted. I also know that they can use TOR for the same purpose, but the fact that most exit nodes are controlled by the US government would make me nervous if I was planning illegal things.
Isn't it way better to use the TOR idea of multiple encryption layers so that every node only knows the previous and next node, but in a botnet? Exit nodes would be as random as any other node and it doesn't seem like this idea is harder to implement than any other botnet (of course we're ignoring things like hidden services, rendezvous points, etc.).
Is there a mistake in my reasoning, has this already been done or is this idea just a bit of an overkill?