Although the iconography of Kali is usually fearsome, especially to non-Hindu eyes, she is not an evil goddess of death in the Western sense. Because Hindu theology regards God as the Ultimate Reality which comprises both what humans call "good" and "evil," Kali's grotesque appearance is the face of God as much as are the smiling features of Krishna. Most worshipers of Kali, of course, regard her as the supreme deity, not just the mythological manifestation of a concept. Nevertheless, she is benevolent and protective of her followers. The literature I have read portrays her almost as a mother bear who will address all threats.
Kali's role as destroyer of demons is both mythological and psychological. In Hindu myths, she mercilessly destoys the foes of order and revels in the bloodbath. On a spiritual level, Kali represents the release from attachment, which is a necessary step in spiritual growth. Kali's fearsome appearance and warlike nature destroy our demons, sometimes external ones, like addiction, but more importantly our internal ones, like our idea that the continuation of this existence or manifestation is valuable in any real sense. When the worshiper faces Kali and loves her as a mother, earthly terrors are no longer so frightening.
Wrestling with the ultimate truths of existence can be a scary, difficult business. Having a deity who combines a terrifying visage and a bloodthirsty nature with a caring, maternal side can make them seem a little more accessible.