Impressive as the emulator is, it's been suggested to him before (and he has acknowledged) that he shouldn't be running non-public-domain ROMs on his site. If he gets a C&D/DMCA takedown, I have zero sympathy.
You are definitely thinking a step ahead. Being able to compile existing programs directly would be great. If someone is successfully using those translators I'd like to see it.
Yeah, this seems totally pointless. I could play GBC (and GBA) games using a Windows program with no problems nearly a decade ago. But this JS implementation lags in Firefox 9 on a computer that's just a few years old.
Why does everything have to be on the web? As with most other things, a mixed approach is the best one.
Basically, emulators are legal (Sony v. Connectix). Pirate ROMs are not (the "24 hours" excuse is BS). Hopefully they don't provide, link to, or otherwise encourage the use of those. There are perfectly good public domain ROMs they can use for the demo.
IANAL, though, so if the person who made this gets any nastygrams, they should talk to someone who is.