It was "designed" for military use in the sense they were computer scientists working for the Naval research, but the community felt like an academic one. For instance, it was originally published at USENIX. The majority of discussion of Tor was related to papers on Anonbib, not about code itself. TBB didn't even exist until much later. I've never seen any evidence that it was ever used "in production" by the military before it was made public.
Re: The NSA Tor slides - they're really not as damning as you say - http://i.imgur.com/cnOeVQf.png - and they're also made before the FBI was caught using remote code execution exploits against Tor users.
Re: The NSA Tor slides - they're really not as damning as you say - http://i.imgur.com/cnOeVQf.png - and they're also made before the FBI was caught using remote code execution exploits against Tor users.