I always assumed that it was real leather, but a rather cheap metallic coating. Not cheap as in the plastic belts that they sell, but cheap as in gold plating as opposed to real gold and such.
As far as the guys not getting up after being hit by it, I guess it just follows the same rule as anything else. If someone outside of the match interferes, you instantly are hurt much more than if the person in the match would've done it. You have a Last Man Standing match, where you take 100 chair shots to the head, and you still get up. But if your opponent's friend comes in and hits you once, that's the straw that broke the camel's back and you're damn near dead, lol.