I hope its as big as dolphin.
I view emulators as a way to play old gen console games, that you own.
(even if by then your old console died on you, or you threw it out)
Basically you preserve gameing history.
By the time this is able to play games well (2years from now?) sales of the Wii U will be so low it wont have effected it any (software or hardware sales wise). I dont really think it hurts the industry, and if it allows you to play your old games, without depending on a console (which tend to break down over the years) all the better.
Also Im curious to see what nintendo games look like, once theyre running higher resolutions and with AA levels on.
The dolphin emulator can do crazy stuff graphically to the Wii games it emulates (makeing them look much better).