I think Apple may be making a mistake by completely eliminating Classic -
Classic provides compatibility for newer Macs to use older applications that were written for Mac OS 7, 8, and 9.
I understand it from a support perspective, but not from a customer satisfaction perspective.
Rosetta seems to be able to do a decent job of emulation/translation for older applications that were built for OSX. That said, there may be potential lawsuit material on Apple's hands because of the way software is currently marked.
I have found some software that is marked:
Requires a Mac with a G3 processsor and OS 8.6 and higher - while I have found others that just say - Requires OS 8.6 or 9.2.2 and higher.
I'm not quite sure why Apple couldn't just port Mac On Linux over to the Mac and make it another emulation layer. Mac On Linux currently supports classic applications better than Classic on Macs - you can have any Apple OS installed that you want to. Mac OS 7 / 8 / 9 all run very well under Mac On Linux.
There are a number of children's games that have always been made for the Mac that will never be ported to OSX. These games would run acceptably under emulation - even under PearPC they run quite well.
Currently, an open source project called PearPC can emulate a G3 300 on a Pentium IV 3.2Ghz machine. This is plenty fast enough for Reader Rabbit and older 68k games and applications.
I even think Apple could go as far as to release its own software application called "Classic":
It could compile all the emulators for ALL Apple products onto a CD. Currently there are emulators available for:
The Apple II
Mac OS 6
Mac OS 7-9
I think this would be a great seller and a great marketing scheme. It would kind of be Apple's attempt at nostalgia and a thank you to all the programmers that have helped Apple stay alive through difficult (pre Jobs) times. I see a lot of value in Apple making it's own effort in house - much as The Blue Sky Rangers have done with the Intellivision Lives project.
At the very least, once the transition from PowerPC processors to Intel processors is complete; Apple should open source and offer OS 8 and OS 9 as free downloads - as they have done with OS 7.5.5
Doing so, could allow programmers to make such an emulator for classic applications, if Apple doesn't want to.
[UPDATE] I wonder if the switch (in some small way) had to do with Microsoft's purchase of Connectix's Virtual PC ... that would be an interesting angle to explore.