I've considered the .38-40 in a Contender for years but never built one. The biggest reason not to was bullet availability. I wanted to use it as a deer cartridge, and there are few/no good bullets suited for the higher velocities of a rifle barrel in this chambering. From some Pet Loads data it should be easy to achieve around 1600-1800 fps with 180-grain bullets. Handgun bullets in this diameter are over-taxed at this speed.
I could use cast, but IME jacketed bullets work better. I wanted a 200-grain bullet with a tough jacket, but there are none which are readily available that I trust to perform. Anti-personnel bullets (like for the .40S&W) are usually not that great as general-purpose deer bullets. That said, I like the idea too and may have one built someday myself.