Though the R4 can be used for more harmless tasks, such as homebrew development, it is also being used as a pirated game player to a large enough extent to draw attention. Nintendo, Arc System Works, SNK, Capcom, Koei, Jaleco, Square Enix, Taito, Sega, Tomy, Tecmo, Hudson, Bandai Namco, The Pokemon Company, Yukes, Level Five, and others are pursuing the case in an attempt to curb piracy.
I guess that's what you get for being first.But they weren't even first. I'm really not sure how the R4 got so popular in Japanese shops (there are even identical cards with a different branding).
And yet all this could be prevented if they allowed for legitimate home brew through something like the xbox creator's club and a licensed flash card.