CMOT70: I'm not sure, it's still really early and the Linux Dolphin thing is just proof to people that it's hacked and can run Wind Waker. But it won't be long before dedicated versions of emulators get ported, plus all the homebrew stuff. It's probably accepted that Game Cube era will be the systems limit under emulation.
Incidentally, the reason they announced this now rather than waiting until more applications get written was because a certain company is soon releasing an actual mod chip that costs money, plus the risks of modding the hardware. The hackers wanted to let everyone know there is a free and relatively risk free option already.
As for Nintendo themselves, well if they had of got their act together and set up a Virtual Console already, like people want, instead of $100 cardboard boxes (Labo)....maybe a lot of people wouldn't feel the need to do this.
Gamecube era is a pretty good limit. I don't have any other handhelds capable of emulating the GC.
That makes sense, when literally every Switch out there is hackable with this method (and will remain so), I can see why they wouldn't want people wasting their money on a mod chip.
It is rather ridiculous that they don't have any VC games at all, not even NES and SNES.
