It's a use case, but I would argue that it's not a significant use case.

And that's the answer to your question about what Yuzu would have fought if they had the money to take on Nintendo.

Emulators are still legal in theory, but I doubt that it is in practice possible to make an emulator for a modern video game system without violating some other part of the law.

That's exactly what hasn't been determined, since Yuzu settled and it didn't go to court.