> Why does it matter if the production cost is higher than the face value?

You can buy pennies or nickels in bulk, melt them down, and turn a tidy profit. That's literally a "money printing glitch"

Every penny or nickel that gets lost in the gutter, stored in a coin collection, used as a washer or shim, turned into jewelery, or sets around in jars unused, represents a financial loss to the Treasury.

It's called seigniorage and melt value. Also see Gresham's law (hoarding).

No, you can't. According to [1] the scrap value of a penny is $0.0084771. The cost of production is $0.037. The relevant question is if a penny creates more than $0.037 of economic value before it is lost or destroyed.

[1]: http://coinapps.com/base-metal/coin/calculator/