It is absolutely a piracy issue. Nintendo are using the DMCA to fight piracy.

It is extremely cut and dried in their eyes: emulation = piracy.

Mario Kart exists on many non-Nintendo platforms legitimately already. The existence of Mario Kart in the arcade or on mobile devices brings people into the Nintendo ecosystem, not draw them out of it.

It is a waste of time to fight individuals downloading games when the tools of emulation exist out in the open. that is why Nintendo are going after emulators themselves, at the current time, emulators are the big, easy wins.