Older games for specific older console hardware were specifically designed.
It leveraged specific features of that hardware.
They literally hacked the consoles they were releasing on to get their desired results.
And because it's consumer gaming hardware/software neither backwards compatible nor forward compatibility for all the stuff the pulled were ever built in. So a game would have to target multiple platforms to actually release on multiple platforms .
It's like why so many games don't run Mac OSX. "Why don't they just release windows software for free on Mac OSX?". Because it needs to be redesigned to work on OSX, which costs money.

Everything up to, what, PS4? is probably specifically tailored to that specific hardware. Games that released on PS3 and xbox-whatever would have some core software dev team, then hardware specific developers. It would be targeted for the target hardware.
At some point, things like Unity and Unreal Engine took over, with generic code and targeted compiling. Pretty much (not quite) allowing developers to "just hit compile", and release to multiple architectures.

Any official re-release of Nintendo games have generally been on an emulated system. Where they have developed that emulation to work with the original software.
There are some re-releases, where the game has essentially been rebuilt from the ground up, using original assets but to work with modern (and flexible) game engines.
Both of these have a lot of work, so not free. Worth $60 or whatever Nintendo charges? Meh, that's competing with real games.

If you own (or buy) a nes/snes/N64 cart, you can rip it. There are plenty of ways.
It's not the source, but it's what it compiles to. And you can reverse engineer the source, then adapt it to modern game engines. There are a few open source projects that do this. Their quality varies.
Or you can build an emulator to run that software, as if it was the original hardware - an emulator.
Nintendo can skip the rip, decompile and reverse engineering steps. They likely have access to the source code, and the actual design specs for the hardware (not just what they tell developers - who then hack the hardware anyway) All of this requires a LOT of work. So a sellable product from someone like Nintendo requires a lot of investment.

Emulators are good. Any used for speedrun leaderboards on equal footing to actual hardware (ie times are similar, even if they are different categories) will be good enough that you wouldn't know.

Games companies don't make products for your enjoyment, they make value for shareholders. Hope that clears it up.

They want you to buy their new games. They also want you to be more likely to buy the old games again when they eventually do a sloppy re-release of the old games or tie it to increase the value of their subscription offerings. Basically to make more money.

Your day has 24 hours, and they care about how you spend it.

Do you spend your day playing old + free games? They call you worthless.

Do you spend your day playing the very newest shit? They call you precious.

Rereleasing an old game has costs. Doing it for free has costs but no profit. It's simple math.

They want you to buy their new games.

Companies don't want you to play games already out it's about controlling what you do play and breaking an old game from running is a feature not a bug. If I could develop a game where customers get nothing and you are required to pay them money. It would be the top funded game by every AAA publisher. Remember the people at the top and especially the shareholders don't care about games.

They care about money and vendor lock in and planned obsolescence is how they get it. Because enough people have yet to say enough is enough. They do that with Legacy IPs because most people say well I bought the first one I wouldn't be a real fan if I didn't buy the next one.

easy to profit by re selling

This was exactly the reason they shut down the 3DS marketplace: re-selling old games is more profitable via Switch Online than it was through the 3DS marketplace!

Record label companies. Various licensing and IP contracts that they never write to be indefinite because of greed.

Nintendo is the worst at this. What do they lose by releasing wind Waker HD on switch? They have so many games like that, just let me buy them off your estore and I gladly will

Why would they release it for free if it still had value to you?

Sometimes, it's because they've lost the source code. Perfect example is Panzer Dragoon Saga. SEGA would love to remaster it, but the original source is gone, and it's apparently too financially risky to invest in rewriting from scratch.

Riven, a game from 1997, just got an official re-release. Probably one of the best video games of all time.

Ones that would be profitable they remake. Ones that aren't they do nothing. Why would they give it away for free? The most you'd ever get is a willfully blind eye to piracy.

Nintendo only doesn't like emulation when others are doing it. It's not like they actually ported the games on the virtual library to the Switch or Wii/WiiU. They're emulating them.

Have you looked at the Nintendo store? It's got tons of old games in there for the switch from various old consoles.

Playstation often has old games in its store, over half the psx library was for sale on the PSP and ps Vita.

They simply hate us.

You won't buy the new one if you're still playing the old one.