Its a legal issue. The reason emulation is allowed to exist is that while no-one is making any money from it then its not worth the time and expense for the copyright owners to pursue anyone.
Copyright exists for for a limited time (I think its a few decades) before it expires.
It doesn't just protect the original IP but the owners right to re-use that IP, which is why its important, particularly now so many old titles are being revamped and released commercially again on platforms like the PS3, Wii and 360. There are also a number of commercial retro compilations being produced now too, so its very much something that the original authors have a right to retain and protect (if you produced something would you be happy for anyone in later years to be able to take it and make themselves money from it without your permission?).
The fact copyright exists ensures emulation remains free and niche so the copyright owners leave it alone, if copyright didn't exist then emulation would be commerical and expensive. So in many ways it protects us and our hobby as much as it protects the people who own the copyright in the first place.