All systems must be emulated for proper hacking to commence. Why? Well, why don't you try making a mod like... Say, Pokemon Ice, but every time you made even the tiniest of changes you had to flash a GBA cart for five minutes. Now, lets say that after a single year over five hundred changes, however small had been made to the ROM. Each requiring five minutes to flash. Each requiring the hacker to go through all the screens and such at normal speed. Not to mention the added cost of a flash-cart. And a GBA, if you don't have one (As I'm sure there are people out there who hack but don't actually own the game). And an AC adapter, if you have any sense.
That's a heck of a lot of time and cash wasted.
Also, without emulators we wouldn't have a real homebrew community, and without homebrew I seriously doubt there would be a ROM hacking community.
---Rant warning---
However much an emulator might help piracy, it's also incredibly vital to hacking. Same with cart dumpers. You can't hack a ROM if you don't have a ROM, and you probably aren't going to get one by asking Nintendo nicely. There are probably a multitude of 'unethical' things that have had to be done to ROM hack. ROM hacking is probabbly legally considered 'Unethical'.
But let's be honest, theres a difference between the ethics of, say, raping and murdering someone and hacking a ROM. If people stoped wasting their resources on pirates and homebrewers/hackers and instead assigned more people to catching criminals, I'd be willing to bet my life savings the crime-rate would drop drastically. I mean, come on, some kid downloads a copy of Green Day's latest album and the cops are on his back faster than you can say 'Oh crap, how did they know?!', but some poor kid gets kidnapped and most likly slaughtered and five years later all we know is that he was kiddnaped in a black van. The reason? Companies run the govornment. That's the plain truth of the matter. They don't even need to bribe anyone. All they need to say is 'Someone is stealling music from us. Make them pay.' and boom, the website's destroyed. Hell, look at what happened to DVD Decrypter and it wasn't even illegal for crying out loud!
What should be done? I say we scrap the law. Chuck it out the window. Screw it, it's old and outdated. It wasn't designed to facilitate computer crime. I say we make a new law. Same basic crimes, except we do it properly. Things like TCMA should be illegal (Hah! You've got to be kidding me? Now your building an incredibly easy to exploit backdoor into every new computer system?! More on that in another rant), workers rights should be a part of the constitution (Thank god for John Howard's new industrial relations laws! Now I can make my workers work 24/7 for minimum wage! More on that in another rant) and we should sure as hell put finding a missing kid higher on the priority list than arresting some geek with too much time on his hands.
When they arrest me for making comments against the govornment (Anti-Terrosist laws: The new terrorists? More on that in another rant), I'll be sure to post here when I get out (That is, if I get out).
---End of Rant---
Thankyou for listening.