There are many MMO server emulators out there. Some private servers are run for profit, and when it is the case, the official and legal operator of the game can sue for disgorged profit, as was the case in Blizzard vs Scapegaming in 2009. Interestingly, out of the $88M Scapegaming had to pay, $3M came from disgorged profit (the private server was running micro-transactions), and $85k came from statutory damages for copyright infringement. Some private servers are run for fun and do not even accept donations. In the case of Ragnarok Online, Gravity used to send cease-and-desist letters to the private servers with the largest number of players. Servers with a dozen players did not seem worth the hassle.
Both WoW and RO are still running. However, the policy towards private servers seems to change when the MMO is discontinued by its legal operator. For instance, SWG closed in December 2011. SWG had an emulator called SWGEmu. In August 2012, the president of SOE unofficially supported SWGEmu:
well officially I have to say it's bad. but that's officially. SOE or LucasArts could have been copyright trolls, but instead, they have decided to close their eyes on private servers. Maybe we can expect the same from Blizzard when WoW dies?