Demon characters, like any other mythical breed, are fine with me on the whole. But of course, as others have said, when they take their powers to a ridiculous level or go around murdering people who did not consent to RP with them, that's the bit I have a problem with. I have maybe three demon characters at the most, and the main one I use has very limited powers. It might just be me, but whenever I make a character of a mythical species, while writing their bio I make very sure to give them weaknesses and limitations, the last thing I want is someone accusing me of powerplaying.
But in general, demon characters are just another type for players to express their creativity through.