The daemon class is used by /etc/rc and root.
I do not know the reason for the different number of rounds, I could only guess it is for performance. You're welcome to change ciphers, or change the number of rounds, as you wish. The encrypted passwords are stored in /etc/master.passwd which requires root access. (If root is compromised, passwords won't matter anyway.)
There was a thread in the misc@ archives from December 2005, about the blowfish cipher and it's use. The thread also discusses other cipher technologies, including MD5.
It starts here:
http://marc.info/?l=openbsd-misc&m=113588769128789&w=2