Re manufacturing one sight from the other was probably done as a cost savings measure - It is cheaper to modify an existing sight than have a new one machined from scratch, particularly if there is an ample surplus of donor sights, and very few of the sight you are trying to produce.

Personally, I am ok with reproduction parts in some cases.  We collect old rifles, some original parts are difficult, if not impossible to find - particularly cloth and leather accessories.  If my reproduction Krag sling gets beaten up at the range, I am out $25, taking a real one out of the house would make me nervous.

I don't think it is crossing a line providing that the sellers are honest about it.  Sadly, some reproductions will get passed off as authentic.  IMO, reproduction parts should have some marking on them that clearly identifies them as reproduction.