Can you live 100% on emulation?

Short answer yes. I've done it before. Sometimes I even feel nostalgic about emulation. Around Aug 97 is when I first tried emulation with Nesticle and Genecyst. At the time I didn't have internet at home, part of the fun was to rent a PC after class, bring a box full of floppies, download and copy emus and roms, get home, unload everything, fiddle with the emus configurations and explore all these systems I didn't have "back in the day" or relive past glories. Thanks to emulation I got to relive the glories in the arcades from the comfort of my house and without spending tokens. I got to enjoy the best the Atari 2600 and SNES libraries had to offer (two consoles I didn't have). I discovered some of what the mythical Sega Saturn had to offer, etc. In 98 I sold my Genesis and games, in 99 I sold my PS1 (kept my NES in storage). From 99 to 08 it was 100% emulation for my pre 6th gen gaming.

Fast forward to 2008, I got nostalgic and bought me a Genesis and good amount of games. Later on I found myself getting more games for my NES and later on I was exploring other systems and definitely got back to getting and using real hardware.

Today, emulation still has its place, the Wii is a great emulation box pretty much for everything pre 5th gen. I got a pad converter and use it specially when I want to record some footage.

Using the real hardware helped me to better understand what was it like "back in the day" using these consoles and computers. Consoles like the Saturn and the PC Engine were great to own if you had access to japanese releases. A device like the XEGS was a good value if you needed a PC that got the work done and let you chill out at the same time. 

As per PC goes, packages like Virtualbox, VMWare and Dosbox are neat but don't quite replicate the experience. One of my recent projects has been assembling a PC like the one I had back in 2000. I didn't realize I forgot so many things about getting Win98 to play along with productivity software and games. And I'm gonna leave it there for now.