My guess is that while it may not be too much effort to get a mostly accurate emulator that works well enough for hobbyist use, it'd be a lot of effort to get something up to the compatibility and usability standards of an official product.

Many older apps may use undocumented functionality or non obvious quirks of the system that an emulator may miss, which means you'd need to have a QA team testing individual apps for compatibility.

Part of Apple's brand is usability and a lack of rough edges. The downside of that is that building a tool like this up to their standards would be prohibitively costly.

I think the main problem would actually be the added storage consumption of hauling around old iOS system images, as would probably be necessary to keep the mainline version of iOS unencumbered from the constraints placed by backwards compatibility — it’d probably just be virtualizing old versions of iOS similar to how Mac OS 9 was virtualized in the early days of OS X.