My comment about other emulators was you need the BIOS to run them and unless you dump the BIOS yourself, you're using illegal data, of course I still have yet to see a Playstation owner sued for possessing a dumped BIOS, but I did see a website almost get shut down for hosting a Sony Playstation BIOS.
Sony not caring about it has nothing to due with legality.
Until recently, you could buy Bleemcast for your Dreamcast, I'm sure there are still stores that have used copies. Bleem! wasn't removed from store shelves because it was illegal. The company went under and the emulator is not very good. I own it so I can say it sucks to some extent, but it was a legal program and so was VGS. Sony bought VGS and took it off the market because it was a good emulator and the only way they could get rid of it was to buy it...
But whether a company is happy or not with an emulator has nothing to do with it's legality.