Actual emulation is harder than what Rosetta is doing. Rosetta basically takes a 64-bit binary that would run on an Intel Mac with Big Sur and transforms it into a native ARM binary that runs on an M1 Mac. It doesn't even bother dealing with 32-bit binaries compiled in 2007 for Leopard or Windows XP/Vista. An emulator would have to emulate hardware/OS behavior and features not available on the host platform, which often reduces the performance to that of interpreted code.
We’ve seen that with Wine and Rosetta, games can still be played. Further if the argument against whether or not ARM can succeed against x86 hinges on backwards compatibility with x86 games then the performance of Rosetta-like translation layers is indeed germane.