I think they are allowed to make these because the original licenses run out. That's why first there were a ton of NES emulator systems, then SNES/Genesis.
The N64 came out in 1996, so I'm guessing it will be at least 2016 before we see that. They probably won't do the 32x because it didn't sell well, and the Sega CD would have to be an add-on to their system (disc drive). I'm not sure how their emulation process works, but I'm not sure if they can use the same process they use on cartridges on disc-based systems like the PS1 and saturn.
patents expired on the oldest consoles, and it is now legal to develop your own hardware to play those console's software. It is still technically illegal to emulate ROMs, but the hardware can be redesigned.
As these more recent consoles are outdated, they will undoubtedly be copied to provide hardware for older software.
It is the legal tape workaround for this stuff. Software usually plays fine, but the consoles break down, controllers die, etc.
Though I can appreciate these products for what they are, I would still be more inclined to purchase a flash cart for my actual NES or other cart console, since every single unit I have purchased of this type has issues with accurate audio. I am a stickler for the sound in my retro gaming, but when this unit comes out, I will get one for my kids.
If you have a nintendo Wii, you can already play Gamecube and N64 (from discs or the market wiiware releases, or from a soft mod option and playing from other sources) My current solution for my kids has been a Wii softmodded to play their games from a small harddrive I ripped from a broken laptop and put in a USB box. Then I loaded retro ROMs and emulation to the USB and SD, now I don't have the discs everywhere, and they have little chance of breaking the unit, all they really touch is the controller.
As for Dreamcast, you can easily find a Dreamcast for cheap, and most units will play either from a network cable or a CDR, I have even seen SD card mods to load ISOs, Dreamcast can also play most retro systems via CDR. Dreamcast does not even need to be modified, just plays off a burned CD loaded with the software of your choice. And there is alot of software for such an outdated system.
PS1 is best left to PC emulation for me, ISO loading and way better image quality, PS2 I just play on the PS2, or I buy the PC version of my favorite games there.
It would be my primary goal to have 100% accurate system reproduction, for complete retro play, in a single system housing all of the older consoles. Might be a hell of an ugly unit, but you could use a CD/GD-ROM drive for the CD systems at least, and maybe combine it with a DVD reading drive all in the one disc tray, and cart slots around a large base.
It would be interesting if there were a way to plug two carts, two controllers, and a little box up to a TV and play split screen MP on oldschool Pokemon or other portable games.
But I digress... It has been a dream of mine since the systems were original and new... just to have them all in one unit with some nice features :P
I still say that a flash cart on the original unit is one of the safest/purest ways to enjoy the older games. The ROMs play perfectly on the actual hardware, and you can fit the entire library on a small SD card, cheap and easily replaced if it breaks. And since you only have one cart, you can leave it in the unit and that also reduces wear and tear. It adds save states to save you from the old NES controller throwing rage fits, and you don't have to worry about the system accidentally deleting your saves. Plus, no giant collection of carts getting shuffled and unsorted (for those of us who still have giant libraries of physical media, but choose to use the digital files to actually play them):D
Until they can offer 100% accurate sound and graphical reproduction from the cart or ROM, I really wonder about using one of these as my game room unit. It would really cut down on the wires though...
I am wondering why N64 is not on this list, but it plays GBA?? N64 and GBC were out at the same time. Having an N64 cart slot on this would make it the perfect unit.