You can get good results out of LCDs and emulation if you take the time to find a good resolution that doesn't get dithered. Some emulators can reproduce scanlines very well, personally I can do without scanlines, I could be happy with just that, my problem is trying to fit LCDs in cabs, you can do it with wood cabs easy enough, but candies? Were gonna need some crazy bezels to make it work.
Edit: There's also the scale issue, were gonna loose a lot of screen space going 16:9...even now is hard to find 4:3 ratio screens new, they're all made 16:9, 16:10, etc.