[Nexus 7 Q&A, Help & Troubleshooting] HEXcube:
adb root

The real reason behind adb root or insecure adb is the adb daemon in the device running at root permissions. In pre-Android 4.1 versions, this is usually decided by some initialisation script(like init.rc) at boot time. The script checks for value in default.prop,local.propand other environment variables.

If it finds build.prop,default.prop or local.prop property file with ro.secure=0 adbd is allowed to run as root. You'll get adb root and hence will be able to do commands like adb remount,adb root and adb shell's prompt'll be # by default. The user may be displayed as root@root or root@shell. adb GUIs like Android Commander and QtADB will get to work in Root mode.

But,if it's ro.secure=1, adb daemon is made to work in secure mode, and adb won't change to root mode on issuing adb root command. However, if su binary is present in $PATH, u can still call su command from adb shell. But, it's not enough for Android Commander to get Root Access. It is possible to attain adb root through any one of the following methods:

1.For CyanoGenMod based ROMs there is an option in Settings->Developer Settings->Root access to control root access. Choose ADB only or Apps and ADB in options to get adb root.

2.Else use adbd Insecure app by chainfire if you have a rooted device. This is useful, especially for Android 4.1+ devices.

3.Or, you may manually edit default.prop to set it's value to 0, but original default.prop will be restored from boot partition everytime you reboot(this is the reason why adb Insecure cannot permanently do adb root, though there is an option to repeat the rooting procedure everytime the device boots). This method is called temporary adb root. On pre-Android 4.0 ROMs default.prop file was located in / directory. I read that from Android 4.x this file is in ramdisk and so more difficult to edit. But Android 4.0 has local.prop which is easier to modify than default.prop( See method 5)

4.For permanent adb root, you'll have to extract boot.img, change default.prop, repack and then flash it back to device.

5. In Android 4.0 there's local.prop file in /data partition. Setting ro.secure=0 in this file will do adb root permanently. Else you can set another property ro.kernel.qemu=1 in the same file. But, this value makes the system think that it is running in an android emulator. Many exploits and root methods set this property temporarily to gain root. But, it may cause side effects if used permanently. Setting ro.secure=0 is recommended. Do this command in terminal app or adb shell:

echo ro.secure=0 >/data/local.prop

or you can manually copy a local.prop file with ro.secure=0 as it's content to /data.

6.Note that method 3,4 and 5 won't work in Android 4.0 Jelly Bean onwards. According to Dan Rosenburg(drjbliss in XDA),the researcher who discovered adb root emulator exploit and many other exploits, Jelly Bean doesn't parse any property files to set the ownership of adb daemon. The stock adbd will have to be replaced with an insecure one to gain adb root. But still,as adbd is located in /sbin whose contents are reloaded everytime on reboot from boot.img, it won't be permanent.

7. For permanent adb root, you may flash an insecure boot.img(one that contains and insecure adbd)

8. If you're really desperate and can't get adb root to work with any of the above methods use an exploit. Most of the adb based rooting methods utilise some exploit to make the adb daemon run as root. By studying the exploit and implementing it you could gain adb root atleast temporarily.I'm not recommending this method but as a last resort you could try them.

Acknowledgements: Thanks to Dan Rosenberg for explaining the reasons behind adb root, especially the one in Jelly Bean.