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Even if it isn't literally stealing away Metroid II VC sales, it's still competing with Nintendo products, while also owning it's very existence to Nintendo products. Some people argue that since it's free it doesn't matter, but it does. It's a free alternative to something Nintendo has 'invented'. If anything it matters more, since there's no barrier for downloading AM2R.
But yeah, it would be nice if people realised the law-related nitty-gritty to a decision like this. People just like posting their knee-jerk reaction, especially if it's aimed against those "evil corporations".