Honestly, not entirely Nintendo's fault. They are REQUIRED to protect their IPs. Even if they don't want to take action, they have to. It sucks, but that's just how it is. That said, would be nice for Nintendo to perhaps release a port of Melee on Switch with online functionality. It would probably sell well, too.
Using a ROM you downloaded somewhere, even if you own a physical copy of the game, is still against the law. It's bullshit, I know, and I wish that wasn't the case, but it is. If you download a rom, you are breaking the law, that's just a fact. The only way you can legally obtain a rom is to get it from a physical copy you own, directly, and even then, you can only legally do so for archiving purposes, not to play your console/handheld games on your computer(fun fact: Nintendo claims you can't even archive your games, but they are lying about that; it's the ONE thing you can do legally). Again, I think that's bullshit, but oh well. My point is that you can't say they aren't pirating the game when you don't know where they are getting the roms from. If these people are downloading the roms from somewhere, they are ABSOLUTELY pirating the game, no ifs, ands, or buts. If they are using their own extracted rom files, then they're merely infringing the copyright by using them to play the game instead of archiving(jn other words, it's not Fair Use). Still illegal. Either they're committing online piracy AND copyright infringement, or they're only commiting copyright infringement.
So, obviously, knowing that, it makes sense for Nintendo to step in. Like I said before, they HAVE to protect their copyrighted works, or they risk losing said copyrights. This is a combination of flaws with copyright law, and weird limits that exist within the whole Fair Use arguement. It's shitty, and it certainly MAKES Nintendo look like they're a bunch of evil asshats, and sometimes they aren't the best when it comes to... certain business practices at times. But it ultimately isn't their fault, aside from not seeing a clear demand for a port of Melee with online features. Wanna blame ol' Ninty for something? Go with that, not their cease & desist. They didn't have a choice in that respect. It's pretty clear that "The Big House" was breaking the law. It's a shame that what they were doing IS against the law, but it 100% is. Can't deny that.
Just wanted to clear that up. Sorry about the long post. (^^)/)