I think emulation and retro gaming are two different things.
On one hand, emulation - software, dedicated devices, running every console you own on every other console you own, ripping your own ROMs and ISOs and so on - is pretty niche. It might be a big and well developed niche, but still far from being mainstream, and the majority of gamers doesn't take part.
On the other hand, retro gaming has been pretty mainstream the last decade, both with virtual console releases, collections and compilations of "classic" titles, consoles such as NES/SNES classic, Game & Watch, PS classic, Sega Genesis / 2 / Game Gear Mini; but also new games with retro aesthetics, various legacy sequels and "spiritual successors", and miscellaneous nostalgia bait. Retro gaming is pretty big these days.