It could be argued that since the Xbox is just a very specialised PC in a console box, people who own a PC already have an Xbox and an "emulator" would simply "unlock" the capability to play Xbox games, rather than emulating any hardware as emulators usually do.
Nice try. But that's covered as well. Essentially, the DMCA and it's British equivalent have taken away your ability to use a product as you see fit, even if it normally comes under the "Fair Use" clause of International Copyright Law.
Another example of a federal crime? DeCSS, and other DVD decoders that are unlicensed by the MPAA, along with DVD players which allow you to play region encoded DVD's from areas outside your own.
Welcome to your 21st Century rights, bought and paid for by the highest bidder.
On a side note, saying the XBox is just a "specialised PC in a console box" is a gross generalization. A TiVo is closer to a standard PC than a XBox is, but hey, don't let me rain on the parade of bandwagon "its teh sux0rs" comments.