Dolphin does exist, true, but it is really unstable. Windwaker runs at about 15fps, and Resident Evil 4 runs at full speed until you try to play it, and I cannot get it to run after that.
Now the issue is that emulation of powerful hardware requires MUCH more powerful hardware, generally. From what I've read, the 360 has gaming power right up there with the most powerful gaming computers in existence. You cannot accurately emulate powerful hardware with weak hardware, as framerates would be slow or frames would be skipped.
Who says that people are not allowed to TRY to emulate the 360? Nobody. But I'll say this...it would be in vein. The computer you would have to build to do the job would cost FAR FAR more than just buying a 360.
Oh, and secondly, concerning the latest gaming systems, don't expect good emulators until you get good mods. (Forget NES and stuff...that was before the modscene was really out). But now, somebody has to figure out what's going on before you can accurately emulate the system, and the first people who are going to figure anything out are the ones who have money to be made AKA Team Xecuter, Team SmartXX, etc. And their understanding need not be complete.
So, I think it'll be a long, long time.