It’s good news in the sense that this won’t be setting a new legal precedent surrounding emulation. Nintendo’s case argued that the means by which cryptographic keys were obtained was in violation of the DMCA, which is an untested angle that could have dire legal ramifications for many other emulators if it were upheld in court.
On top of this, the Yuzu devs were a bit too brazen with their attitude towards piracy, and after consulting their lawyers they must have realized they have no legal ground to stand on. Any other emulator that runs a tighter ship in regard to copyrighted material (like most do) wouldn’t be in such trouble. Nintendo wouldn’t have a case with almost all other emulators, Yuzu in particular was giving them a lot to work with.
Yeah, all things considered this might be the best case scenario for this to play out, short of Yuzu somehow winning in court. It sucks to see Yuzu shut down, but the risk of new legal precedent surrounding emulation was far more concerning. At least Yuzu’s source code will still live on.