Not wholly apocryphal. The U.K.'s air traffic control ran, and possibly still is running, on an IBM 4381 substituting for an IBM 9020.

* https://news.ycombinator.com/item?id=49763972

They've reportedly already tried, and failed, to replace it with a more modern system.

Which is why we should target VMs directly. Then that VM can be brought forward to new platforms rather than emulating the entire machine, not that emulating the entire machine is bad. One could argue that the emulation stack you outline was made possible by putting in the work to make simple, fully specified and documented hardware.