Whilst I don't like it, it is their right to do it. It's their intellectual property and the guy did it without permission. Aye he's not making money from it, but it's not as if he's being sued or taken to jail, he's being asked to take the game down. But Nintendo are still making money from the game, so it makes sense that they'd expect people to desist when offering a free version, when somebody might otherwise pay 'x' amount for a version on the Wii. It puts Nintendo less in control of their own product if people are freely distributing them via one means or another. Personally I'd argue, it's old, people love it and people could discover a love for Mario and in turn buy other Mario games and let this slide as a gesture of good will to fans. But a businness may prefer to protect their intellectual property, which is a valid thing to do.
There's a number of old games out there being resold by the owners to the rights of those games, including the majority of Final Fantasy, Sonic, Zelda, Mario, Grand Theft Auto and other classic titles. Yes it doesn't really hurt if these games were released freely as they've made their money, but it's their intellectual property and it's up to them to decide how they want it used, not us the consumer. Of course, if we believe a company should act differently, there are feedback processes - enough feedback can have an effect (at least it has done to a degree where I work) or alternatively - to steal a phrase from Jeku, speak with your wallet. If enough people speak strongly enough, it can push change, for instance, Square Enix, their worth has gone down, sales have gone down and have been looking to make a change in their approach.
