This Kitco forum thread about fake Krugerrands being sold on eBay raises some interesting points. You can find the items by searching for 'copy Krugerrand'.
The seller is not attempting to pretend the coins are anything but gold plated fakes:
"All our reproduction coins are non-monetary, and comply with the US Hobby Protection Act - 15USC-2101, as well
as all Ebay rules and regulations regarding the sale of reproduction coins.
Per the US Hobby Protection Act, all our replica coins are stamped 'COPY'. The word 'COPY' is located parallel to the kings back."
So, no real problem then? No-one would expect to buy a Krugerrand for $40 anyway???
The trouble is that fakes can be produced without the word 'Copy' on them just as easily, and reach the market. The thread discusses what collectors can do to protect themselves, the most obvious thing being to buy a set of digital scales (since fake coins are much lighter than real gold) and/or a set of calipers, since fake coins are never the correct diameter.
You can even buy special scales (on eBay of course) which are designed to detect reproduction Krugerrands, Eagles, Britannias and sovereigns.
Why would anyone want to have a copy Krugerrand, or any copy gold coin?
The Kitco forum thread mentions a few reasons, including using them to create a fake stash to trick armed robbers or burglars, so they don't look to hard for the actual, real stash. Of course, this assumes criminals never read online forums....