One of the largest markets for replicas is the entertainment industry. Which uses squibs, blanks or other methods to make it look like they were fired. Which without modification can cause serious injury or death.

Having a pistol that can fire a low charge blank doesn’t need a fully hardened barrel, which on some is easily replaced. As an example.

There is also the ability to make someone think you are holding a firearm that could cause them harm (easy if the person isn't infantry qualified), especially during a robbery.

These people didn't have them to put them in a shadow box, they had them to appear more dangerous, which can push them into the terrorist designation.

If it looks like a real gun, it's pretty much exactly as effective for commiting crimes as a real unloaded gun. There's very few legitimate reasons to have a replica firearm and they are highly regulated. Anyone with a criminal record would not be able to get a license for prohibited firearms.