This is what concerns me. P.R. is clearly paying tribute to SMB but is also clearly NOT based off of the big Ns assets. I don't care how similar something is as long as it doesn't create brand confusion. No one except that confused troll was confused when they bought Sprybugs work.
It doesn't have to be the original assets. It is the same compositions, and the sprite work clearly depicts Mario. Imagine the music industry, you can't go out and just release a CD with your own cover version of Thriller and say it's different, because it is not the recording done by Michael Jackson.
Seeing how close the Mario sprite looks to SMB 3, and hearing the great renditions of the SMB soundtrack on the 2600 is definitely the selling point.
I agree that it's a tribute to the game, and won't hurt the brand, or cut into sales of official Mario games... but with the attention the game got I guess Nintendo just had to react, see David Crane's comments in the thread about Pitfall for Lynx. A copyright holder is required to interfere with such infringements if he learns off them, or else he can lose the copyright.
It's sad, but that's the way it is. AA should not sell such games in the future, and if homebrewers want to make such tributes they should just share the ROM. I am sure people can get cartridges made for themselves in private without drawing attention.