Lunacy? Nah, the vast majority of software that regular people use is massively I/O bound. For the stuff that isn't (photoshop, e.g.), it will get ported. All of those non-photoshop apps will work just fine under emulation. Chrome and Edge will be ported, they'll work just fine.

I predict that this will have a negligible impact on PC games. They're CPU/memory/GPU bound and will not work well under emulation. They're not likely to get ported. But gamers are not the target market for this product.