I don't think there would be any huge legal difficulties... Nintendo MIGHT go after ROM sites hosting GBA roms more, but that would be about it. The GP32 itself is just an open source console, it doesn't have any special graphics chips or anything that would make it illegal in respects to the GBA (just my thoughts, who knows what Nintendo would try of course).
My worry if a GBA emulator is ever developed is for the community. Yes, in one respect it would help the community as sales would increase some at least. But, I think the quality of people joining the community would decrease immensely. This is a great set of people who want the best for the machine and the gaming industry in general... we all just love games! If there was a GBA emulator, most people joining (buying GP32s) would be interested in nothing more than pirating GBA games "and more".
My two cents, probably nonsense!