I suppose the replacement words decrease the intensity of what is being said, sound somewhat humorous and take a bit more control to actually say than the real thing. Usually they are used in events where you are trying to sound less offensive, but still want to get your message of frustration/anger across.
At my last place of work we had a swear jar that you had to contribute to if you swore using one of the real words. A co-worker of mine was essentially trying to make herself feel a bit more professional while at work. It ended up extending to everyone that came into our area. Depending on the word said determined the amount that had to be paid. The most (the MF-word) was $.25, the least was $.01. Lets just say that within a three month period about $30 was collected from various co-workers who swore when they came into our area (a sign was posted about the rules). It was going to be put towards a mini-bike that could be used by people on our team. Three of us were the only ones that never had to pay anything to the jar. 😀