Here is my theory on why Saint Joseph is known as the "terror of demons":

The primordial sin of demons is their pride. They treasure their selfhood and personal power above all things. They are proud creatures, willing to damn themselves and the world rather than serve.

Saint Joseph was a man of many virtues. He was full of faith. He was hard-working. He was devoted to God, and willing to serve him. But underlying all these virtues is one basic virtue from which they all sprung: he was HUMBLE.

Saint Joseph was a man who never rose to a great station in life, from what we know did not live long. He was always and in every way a small man: a little and inconsequential man who did his best and lived for God in the little ways He could.

And even when serving as God's adoptive father, he continued to be a small and humble man. A simple carpenter, a man dedicated to his little family.

Saint Joseph is powerful against demons because he in every way was and forever will be HUMBLE. The demon is a spirit that revolts against it's foreordained purpose, an angel that raised his hand against his Creator. Joseph is forever the Hero Of Humility.

Satan flees before the cross of Jesus because in it even he can see what perfect obedience, even unto death, looks like. In the same way the perfect, resigned, patient obedience of Joseph is a pillar of flame in the spiritual world. Demons see it and flee for their lives.

This is how the goodness of God triumphs over an evil world. Evil is loud. Evil is a braggart, an elephant stomping over lives, a wild and wicked thing. Good is a man soothing his baby to sleep, mildly and gently rocking his child in his arms.

Joseph was such a man.

And this is why demons fear him. Not out of some terrible imposition of spiritual power, not out of some ray of holiness that will vaporize them. Because saint Joseph is that humble, holy, simply good man who calls his children to his side and goes "ok, it's bed time."