So Nintendo is going after Newgrounds now.

[NICKtendo DS]

It doesn't matter if 1000 people put 100% effort in the product. If it's a copy of a copyrighted game, or an enhanced version, it's not far away from illegally distributing the original game. It's no longer a matter of fair usage. If a company decides to shut the project down, they have all the right to do so. It's hard to accept for the fans, but that's just the way it is.