Toribash is far, far too easy to crack (note; crack not 'hack' learn your definitions people.) and it allows far too much, for instance the game doesn't check properly if you are banned when you try to interact with the server, and this whole tb.exe cracking which according to people I've spoken with (who I wont be naming) can be done in an afternoon. I've also herd that the key algorythem is simple enough it can be done in your head, tempting fate much?
Well hopefully hampa or another member of the dev team will decide to do something about it, personally I don't want to mess around with the toribash executable or other such actions but recently it's come to light that it's far, far, far too easy... wanna make money from a game? try not to let the client edit or disregard server side rules.
As for legality read the ToS you signed for once.