I think it can be done - for instance, the TI-89 calculator which runs on a 10mhz 68000 CPU can actually emulate the ZX spectrum! Moreover, it does grayscale which has to be done entirely in software because the display is 1bpp too! Now, that's about 3 68000 cycles for one Z80 cycle plus the grayscale thing. Right, the two SH2s both run at 28mhz or something, which actually leaves about 4 cycles to do one 68k cycle. As the SH2 is pipelined and can do more opcodes in a the same number of cycles than the 68000, and, there are TWO Sh2s I believe 68000 emulation can be run at decent speed - now just because this SMS thing, which is written in C with SGL afaik, runs slow doesn't mean that with some hardcore optimization and proper workload distribution it can't be done. Of course, not all games would fit in the 2mb of RAM so a memory expansion module would need to be used for some games...