That logics confusing. So if you own the game, but your buddy owns the hardware, you dont have the right to play it?

Are you playing your own bought copy of it? From your own disk, wich you put into your diskdrive everytime you play? If so, then yes.

Dumping your disk is a legal grey area. Basically its ok as long as the disk isn't copyright protected. If you break copyright protection while dumping the disk, it's illegal.

Its 100% not legal but you will not be punished for it. I prefer playing the games on original hardware, but its deff an option for some.

At least in the US owning the original hardware has nothing to do with it. It is literally how permalite stated. As long as you own a legitimate copy of the CD and you don't make a dump, but have the emulator straight up playing it from the CD (or installing from the CD but not playing it without it being put into the diskdive), you break no copyprotections and are perfectly within your legal rights.

What you are referrring to, is specifically about dumping within the purposes of backup copy. The legislation pertaining to that varies drastically between countries. But rule of thumb is: If you break a copyprotection by doing the dump (hint: this applies to most movies and games, but not music cds) then it's illegal. As far as I know, even then you don't have to have owned the original hardware.

Incorrect. This has already been tested in court with the Bleem! vs Sony case.

You do not need the original hardware to play these games.
And this is not "ripping" the game, that would actually constitute as piracy in the USA (But not in say... Australia where you can copy media you own.)
It is running the game directly from disk.

This. When you buy some SW, in no way its license can force you to buy something else, although the HW platform owner won't give you any help to allow you to run that SW on anything different from original HW or its own official emulators ("virtual consoles" are just that). Issues about HW and its firmware are different: SW DEVELOPERS MUST follow HW platform owners rules to develop and sell officially licensed SW for it (they strike deals for the licenses, so they explicitly accept stricter rules than just the IP laws), while emulators devs have different rules and laws to obey to, they CANNOT rip the HW's proprietary firmware to make their emulators, while reverse engineering of HW and FW is a different matter, allowed in some countries, allowed with restrictions in others and forbidden in others. Another completely different field is jailbroken original HW, in this case in most countries it's illegal to modify the first party original FW, while it's legal to completely remove it and replace it with third party one not containing IP belonging to the HW and original FW maker.  In their turn, end users of original HW can mod with legal third party FW, not containing parts of the original one, the HW they BOUGHT, but they CANNOT do it on HW they're using in commodate.

*Emperor Palpatine voice* "I will make it legal".