Emulators are legal. However, basically the main thing one does with emulators is use ROMs. ROMs are illegal
Right from the Nintendo Corporate Info site:
What is a Nintendo Video Game Emulator?
A Nintendo emulator is a software program that is designed to allow game play on a platform that it was not created for. A Nintendo emulator allows for Nintendo console based or arcade games to be played on unauthorized hardware. The video games are obtained by downloading illegally copied software, i.e. Nintendo ROMs, from Internet distributors. Nintendo ROMs then work with the Nintendo emulator to enable game play on unauthorized hardware such as a personal computer, a modified console, etc.
Can I Download a Nintendo ROM from the Internet if I Already Own the Authentic Game?
There is a good deal of misinformation on the Internet regarding the backup/archival copy exception. It is not a "second copy" rule and is often mistakenly cited for the proposition that if you have one lawful copy of a copyrighted work, you are entitled to have a second copy of the copyrighted work even if that second copy is an infringing copy. The backup/archival copy exception is a very narrow limitation relating to a copy being made by the rightful owner of an authentic game to ensure he or she has one in the event of damage or destruction of the authentic. Therefore, whether you have an authentic game or not, or whether you have possession of a Nintendo ROM for a limited amount of time, i.e. 24 hours, it is illegal to download and play a Nintendo ROM from the Internet.
How Does Nintendo Feel About the Emergence of Video Game Emulators?
The introduction of emulators created to play illegally copied Nintendo software represents the greatest threat to date to the intellectual property rights of video game developers. As is the case with any business or industry, when its products become available for free, the revenue stream supporting that industry is threatened. Such emulators have the potential to significantly damage a worldwide entertainment software industry which generates over $15 billion annually, and tens of thousands of jobs.
What Does Nintendo Think of the Argument that Emulators are Actually Good for Nintendo Because it Promotes the Nintendo Brand to PC Users and Leads to More Sales?
Distribution of an emulator developed to play illegally copied Nintendo software hurts Nintendo's goodwill, the millions of dollars invested in research & development and marketing by Nintendo and its licensees. Substantial damages are caused to Nintendo and its licensees. It is irrelevant whether or not someone profits from the distribution of an emulator. The emulator promotes the play of illegal ROMs , NOT authentic games. Thus, not only does it not lead to more sales, it has the opposite effect and purpose.
How Come Nintendo Does Not Take Steps Towards Legitimizing Nintendo Emulators?
Emulators developed to play illegally copied Nintendo software promote piracy. That's like asking why doesn't Nintendo legitimize piracy. It doesn't make any business sense. It's that simple and not open to debate.
People Making Nintendo Emulators and Nintendo ROMs are Helping Publishers by Making Old Games Available that are No Longer Being Sold by the Copyright Owner. This Does Not Hurt Anyone and Allows Gamers to Play Old Favorites. What's the Problem?
The problem is that it's illegal. Copyrights and trademarks of games are corporate assets. If these vintage titles are available far and wide, it undermines the value of this intellectual property and adversely affects the right owner. In addition, the assumption that the games involved are vintage or nostalgia games is incorrect. Nintendo is famous for bringing back to life its popular characters for its newer systems, for example, Mario and Donkey Kong have enjoyed their adventures on all Nintendo platforms, going from coin-op machines to our latest hardware platforms. As a copyright owner, and creator of such famous characters, only Nintendo has the right to benefit from such valuable assets.
Isn't it Okay to Download Nintendo ROMs for Games that are No Longer Distributed in the Stores or Commercially Exploited? Aren't They Considered "Public Domain"?
No, the current availability of a game in stores is irrelevant as to its copyright status. Copyrights do not enter the public domain just because they are no longer commercially exploited or widely available. Therefore, the copyrights of games are valid even if the games are not found on store shelves, and using, copying and/or distributing those games is a copyright infringement.
Haven't the Copyrights for Old Games Expired?
U.S. copyright laws state that copyrights owned by corporations are valid for 75 years from the date of first publication. Because video games have been around for less than three decades, the copyrights of all video games will not expire for many decades to come.
Are Game Copying Devices Illegal?
Yes. Game copiers enable users to illegally copy video game software onto floppy disks, writeable compact disks or the hard drive of a personal computer. They enable the user to make, play and distribute illegal copies of video game software which violates Nintendo's copyrights and trademarks. These devices also allow for the uploading and downloading of ROMs to and from the Internet. Based upon the functions of these devices, they are illegal.