So, after much confusion, seems that there is a bug with the "copy_object" method.

The documentation states that you can do:

object = bucket.objects.find("lenna.png")
object.copy(:key => "lenna.png", :bucket => bucket, :acl => :public_read)

But after digging around I found that the :acl => :public_read causes an InvalidArgument Error.

https://github.com/qoobaa/s3/blob/master/lib/s3/object.rb#L40 parses the acl attribute on the object for normal "saving", but for the copy method, https://github.com/qoobaa/s3/blob/master/lib/s3/object.rb#L159, this parsing is skipped, sending "public_read" to S3, which it doesn't allow. i.e. "_" instead of "-".