Well, that answers that.
The answer from Brandon Watson, Director of Developer Experience for WP7, should have been expected: unless there is a legal way to host and distribute those ROMs, it's a violation of IP law. The answer should be a no-brainer really and Microsoft would be putting themselves in an odd position with Nintendo if they were to allow such an app to be distributed. Heck, Microsoft is hesitant about adding a screen shot tool because of these issues, that should tell you something.
Still, here's to homebrew and sideloading!