At least, why do the Shambhalans enslave them?
Ok, it's like this. They still have remnants of their old magic tech from the bad old days. In this case, mandalas!
They can use a mandala to drill a hole into Infinite Time and bind it into common time. Remember from the other series that Infinite Time is bad news for mortal life (those two prophets ran around trying to plug up leaks: that was their whole raison d'etre), so we need to have a demon sitting inside each mandala converting the power into usable form (heat, electricity, etc.) It's Eeeeevil energy, but mostly clean. Let's not talk about the long term effects right now. Eventually, the demon sucks up enough thought/biodata/whatever from the mortals around it that it can incarnate properly if released. After 100 years, the law says that the demon is to be freed. About one percent choose to stay on Earth (and get marked and "adopted" by a sorcerer/priest type). The rest are banished back to whatever hell they were summoned from.
So while enslaved, the life of a demon is pretty boring. Not much of a life at all. Once freed, they can eventually get a human style life for themselves, though they do face some prejudice. Would you let a demon (however tame) marry your son or daughter? Especially as human/demon hybrid babies are unlikely to survive without illegal interventions (like feeding it a mortal baby to give it a stable body-print). My main character got as far as the "giving birth to a hybrid baby" part, but she couldn't bring herself to murder an innocent. So yeah. That's why she's not the happiest person in the world (and the marriage didn't last.)
Short version: "Kill, kill, hate, hate! Maim, murder, mutilate!" (What a demon thinks while trapped inside a mandala.)