But why would you bother faking a coin that was obviously never minted?... Oh DUUH, as Homer Simpson would say...because there is always someone out there who hasn't done their research and is willing to buy anything.
Everybody knows one or two things about most subjects. Most Americans will probably have heard/recognize the name "Morgan dollar". They might even know the portrait on it. But for non-collectors/investors/etc, thats where the knowledge ends.
Mr. Average Joe goes to a flea market. They see a bric-a-brac seller has some coins on the table mixed in with the 'tat', the Diana Wedding souvenir mug, the Niagara Falls teaspoons, etc. Joe espies a Morgan dollar with an old date. "Ahh, I know those can be worth thousands" he thinks to himself. Its a snip at the dealer's asking price of $20, so he buys it.
If the dealer is a shady character, he has a roll of Chinese counterfeits under the table, and next day puts out another one on the table, ready for the next "lucky finder" to come along.
Of course, there is the world's largest flea market, oops "online marketplace", eBay. What % of coins on there are authentic, versus how many are offered by fly-by-night sellers who will withdraw buyers payments to their bank account and be gone by the time buyers find out their "silver coin" has as much silver as a nickel.
I heard recently that some experts estimate that 90% of all Civil War antiques of the Confederate Army "out there" are fakes. The original production facilities were not great, so the output is simple and relatively easy to fake, while many people are interested in artifacts of that period.
All-in-all, it makes buying from knowledgeable sellers all the more important nowadays. Anyone offering antique coins or many other things online "found in deceased grandpa's attic" need to be taken with not just a grain, but a whole pillar of salt.