So before I buy Xenoblade (WiiVC game) on the eshop pretty much solely for gamepad support, I would like to know if by using dumpiine, is it possible to extract a .wbfs or .iso file so I could use it in dolphin legally?
If it is your copy you are using, then it is legal.
If you re-distribute it or download a copy off the internet, then it's illegal.
And apparently Dumpiine only dumps the RPX and RPL files. "It does not dump content files! Use TCPGecko to do that." Though if you want it as a .wbfs or .iso then I am not familiar with what you would need.