Answer:
It is illegal because it is considered counterfeiting.
Actually you can, however, you can not make it the same size. It needs to be either noticably larger or smaller. This is based on experience. An employer of my ex was all pleased about a new copier he got for the store in the mall and made copies of $50 bills and stuck the up at the store entrance as advertising. Later in the day, the FBI arrived and had him remove the copies and told him that the needed to be either larger or smaller.