Despite the winner takes all outcome, server emulators were born of a spirit similar to standard emulation movements, like the Underdogs, and a number of illegal console emulator groups. People either wanted to keep playing only what they liked, didn't like the way it was being run, or just wanted to see if they could do it. The concoction of motives led to communities such as the now-defunct EQHackers.com. EQH worked with a strong anti-corporate mission statement, allowing intrepid users the chance to host their own small EverQuest servers on local machines. Their goal was to stick it to The Man - they'd host cheat programs in addition to message boards detailing exploits along with emulation literature. The negativity in the place toward SOE, eventually led to a meltdown of internet drama. EQH was lost to the ages sometime in 2002, but other groups carried their momentum all the way to the present.
But emulating someone's intellectual property is technically stealing, right? The owners definitely think so. As recently as late June, SOE sent a cease and desist order to Winter's Roar, which was known as the largest player-run server in the EQ emulation community. World of Warcraft already has renegade servers all over the place, and Blizzard is extremely active, tracking down hosts and siccing the lawyers. According to one of the most popular server operators, "UO servers only manage to stay alive because UO's legal minefield is a tangled mess, so mangled that over the years EA's lawyers have had trouble sifting through it." As a result, player-run UO shards dance along the edge of legality by allowing their users to play for free. But as the mess becomes untangled (whether by EA's lawyers or governmental regulation) they may not continue dancing.
Despite the legality issues, many hackers make the leap to legitimacy. A few job applications ago, I was asked for a resume of the server administration and world building I'd done on player-run servers. I actually didn't make the grade because my "uhh, I dabbled in UO shards" wasn't nearly as competitive as my peers'. Rumor has it they hired a guy who ran an entire infrastructure of reverse engineered worlds. Even though developers seem to cry foul at the thought of people using their technology in ways beyond their control, they still respect the process.
Further, not every developer is fanatical about shutting down servers hosted by enthusiasts. VIE, developers of Subspace, officially called their much loved, but poorly publicized efforts a wash in 1997, and players were able to crack game CDs to find server code included on the disk. The community spanned across the globe, diehard fans uniting to keep the game they loved from being lost in the annals of history. Eventually, two men - one of whom went on to found Kazaa - reverse engineered Subspace from scratch. They named their project Continuum, and it could be patched and updated at will. VIE eventually was able to pick up where they left off, and now host official servers in addition to those run by players.
Subspace's community is a great example of what can happen when good people come together to keep something they love alive. Unfortunately, though, a big chunk of player-run servers are cesspools. No matter the good intentions of their beginnings, they become havens for people too childish or depraved to conduct themselves on a regulation server. The most recent example is a UO shard called IPY (In Por Ylem - the power words of a bugged spell, capable of killing people instantly if cast). IPY was created under the pretense of restoring the game's "golden age," but it fell dramatically short. The admin who ran the shard, Azaroth, ended up having to close the server after disgruntled users began threatening him in real life over changes he made.