Yeah, Ive heard people talk about using the gold dollars to pay for their faire expenses. It's a nice way to feel more period. The only difficulty is that a dollar doesn't go as far as a period coin would, so you have to carry a bunch of them.
As for gifting the kids with them... ugh... Apparently concerns have been raised about it being... well... concerning that "those knights" at MDRF are giving things to kids. I mean really... really? People are worried about knights bending down to speak kindly and give a coin to a child, with the parent's supervision? We've been asked to tone it down.
I think some faire-goers just aren't happy unless they're complaining about something.