I understand why hacking isn't allowed but why duplication? Its something pretty much everyone does if they know how. Its simply a glitch in the game, like getting onto the train tracks or in the river. Its pretty harmless, like using ACToolKit is. You use it to get what you need.
I feel it's to preserve the genuine nature of the game. Some people want to play it 100% legit, and this site was made for that reason. If someone wanted to buy hacked/duped goods, there are plenty of sites like that. I think that's what ultimately separates TBT from something like GameFaqs.
Of course, this is just a personal guess.
Edit - this would also explain why hacked and duped Pokemon are allowed; because this is a forum based on Animal Crossing.
If people are trading duplicated items, then it's more difficult for people who don't dupe to trade their items since their stuff is worth less because of all the duped items for sale. This is different than glitching into the river or train tracks which looks weird but doesn't affect anything.
The main reason is to keep it genuine, and keep it fair. Lots of people will say because it may corrupt your game, but that's not true. From my perspective, there's basically two things about selling duplicated items on here that can go horribly wrong with trading:
1.) It's just plain unfair. You literally duplicate items for a quick buck or to get something you desire. You didn't work for it, you basically cheated to get your way.
2.) Just like with the economy, if your duplicate items, their value goes down quickly. People stop wanting them, they become common so people price them less, etc. (I've seen situations like these on several games)
The only thing acceptable that I can understand is if people either use duplicated items that they duplicate themselves to decorate, or they simply give them away. (Unfortunately, you cannot give away duplicated items on TBT either, and I cannot tell you why)
If it were allowed it would make rare items and DLC lose its value and everybody would just ask to duplicate something rare for free. Thats one of the reasons not to allow it.