See now, this stance from Nintendo annoys me. I have a little handheld called a GP2X, its not really got any commercial software for it, but what it does have is an amazing homebrew community. Nintendo are missing out on a big market here. Just to give you an idea, my GP2X currently has amongst alot of other things a MAME emulator on it which lets me run arcade roms, and also has a PSX emulator in development...It can emulate Amiga's, Atari ST's, Spectrum...I could go on for hours.
Of course what Nintendo is worried about is obvious....Emulators mean cutting into VC sales of which they've already made a massive massive amount of money from.