on the subject of ethics...
I'm pretty sure all of the the really cool, ingenious stuff that some the brilliant minds of this forum (and others like it) isn't particularly ethical in the first place. If I recall correctly you're only allowed to emulate/copy/reproduce games that you own, for personal use only. We're beyond that now. This is more like, sub-ethics... like an honor code among thieves.
@idc and
@xRealNinjuzx are right tho: someone else without the same honor code will spoil the lot in time, and at least in the US Nesica isn't really a thing, but there also aren't a whole lot of arcade owners here either. Worldwide, the real shady arcade owners will find a way to be shady regardless.
If you make guns, but aren't the one pulling the trigger, are you responsible for all the lives that are lost?
...I need to lay off the coffee
We're talking rather subjectively; there is lawfulness and there's ethics.
So really, downloading games and playing them, via any means, be it in original hardware or an emulator, where you don't have a licence to do so, is unlawful. Even if it's for "personal use". The ethics come into play when one considers whether the downloading and playing of a game that one doesn't have the right to play causes a loss or damage to the developer/publisher.
CPS2 is a good example. Capcom no longer support or sell CPS2 titles. There is only a second hand market, and Capcom certainly don't profit from that. CPS2 games (unmodified) also suicide. So ethically, one could argue that being able to hack, decrypt, revive, convert or resell them, or whatever, does zero harm to Capcom. As such, there is very little chance of any legal action from Capcom.
However, we have the NESiCAxLive dumps here... They are games which Taito still actively sells and supports right now. So I'm that respect, ethically, the leak isn't a good thing. Yes, I would love the play the games; if the means to play them on my TX2 dropped into my lap tomorrow, you can bet your ass I would give them all a go. Most of us probably would. And this is where the other side of the ethics coin falls: I'm in Europe. If I wanted to play those games here, I have no other alternative than an illegitimate copy outside of Japan.
It gets even greyer when publishers reuse older titles on newer platforms, like CPS2 games on NESiCAxLive, where emulation of those titles was regarded as "okay". Should it no longer be the case?
As for "honour amongst thieves", it's been convention within the scene that when software was cracked, it should only be modified enough to remove the protection. Adding a cracktro (or more recently, an nfo file) is fine. Modifying the game itself to add watermarks, was widely regarded as a laughable. Repackaging someone else's work, adding protection in some form to it, then selling it for actual profit was regarded as the ultimate dick move.