As long as they're not distributing iOS or any proprietary ROMs with it then the emulator is perfectly legal.
Some emulators solve this by providing their own (re)implementation, but that’s not always easy.
And even when it’s “just” iOS: That is copyrighted too! So it’s the same problem – either there needs to be an iOS ABI-compatible OS, or it’s probably not possible to emulate any application legally, unfortunately.
I really hope I’m wrong about this, but I feel like between this and iMessage, Apple might lean on DMCA before too long to protect their walled garden.