It does, but most CPS-1/2 games look pretty odd at 1:1. The games themselves weren't made to run widescreen or anything. Take Ryu, here, from the opening of Street Fighter II, first in 1:1 and then the way it was intended to be seen:
The second is definitely far more natural looking than the 1:1 view, where his face is wider than it is tall (!). I mean, there's people in this thread who just want to play all their games on every platform scaled to 400*240, so playing CPS games at 1:1 PAR is pretty much the least horrible thing anybody could possibly do by comparison, but you will get a lot of oval-shaped Earth and Moons in Marvel vs. Capcom playing that way. :V