The proliferation risk of nuclear fuel is overblown. Reactors don’t use weapons-grade fuel, and purifying it to weapons-grade material is harder than making the fuel to begin with; if you can take fuel and refine it into a weapon, you might as well start with unprocessed uranium.
I find it interesting that spent nuclear fuel contains a fair amount of weapons grade Pu, but it also contains other isotopes of Pu which you wouldn't want and would be difficult to separate.
It could definitely be used for a dirty bomb, which could, if nothing else, cause significant economic damage from the fear of radiation.
