Sorry, but they are in their rights, people are playing on the PC so that implies people are using .iso file of a SPECIFIC version of the game since it's not possible to use slippy (a mod in dolphin for online play) with differents versions of the game. So at this moment it's obvious people are playing with a pirated copy, maybe not everyone, but it would be a lie to say it is not the case of the vast majority.
Maybe I'm wrong, but the event was supposed to generate some money? If it's the case this is the actual situation :
- People are playing on a pirated copy of the game
- With a not allowed mod
- And they should be able to earn money on this ?
Don't get me wrong, I don't care about this tournament, I didn't even know it was a thing before the drama but I think Nintendo did nothing wrong in this case.