What made Demon Tao and even Demon Yan feel great fear was Cain's overwhelming future potential. Even if Cain's cultivation were to suddenly slow down tremendously, his future would still be overwhelmingly bright.
His cultivation base may be limited, for now, but it can already suppress a vast majority of Divine Star geniuses. The density, thickness, and intensity of Cain's Inner World energy were tremendous.
Furthermore, the profound principles within his Divine Laws can directly suppress his foe's Divine Laws on a fundamental level, causing them to be weaker than him.
Demon Tao could still recall what he felt when standing before Cain's Divine Aura. That suffocation within his chest couldn't be faked. Without using the full power of his Inner World, he felt as if there was no possible way he could ever match Cain. His Laws would've been obliterated in an instant.