It would be pretty hard to beat a hacked Wii and a PVM.
There is no substitute for real hardware though, I agree, which is why I use real hardware on real CRTs. When you're want to play unobtainablly rare games or fan translations use flash carts and CDRs.
If you want something in between, like something with dedicated or repoped chips, real cart slots, and such...it's never going to happen, and if it did there would be so many ways for it to go wrong it's not even funny.
Something that could actually be built and would actually be helpful for the community would be a flash drive for the CDROM2 side of things. A way to play ISOs off sold state media. I don't see any reason why I couldn't keep a Core system going for the rest of my life, but those CDROM2 drives...I'm not sure what that's going to be like in another decade or two.