The bottom line is that Virtual Pinball EMULATES... and the physics engines dont compare to a real pinball machine, no matter what. A mediocre pinball machine is still better than a perfect recreation of a good machine, simply because of the physics and mechanics. Virtual cant compare to the real feel and action of a flipper hitting a silver ball around and the machine which in turn gives feedback by hitting a bumper or destroying a castle, no matter how hard you try to emulate it.
What emulation does do is open the door to more pinball lovers. It gives the opportunity for someone, like my 1 year old son, to experience something (when he gets a little older), that I loved without having to travel 3-4hrs just for him to get the chance to play just 1 or 2 tables (most kids dont have the attention span and would get bored with just playing 1 table over and over). Also, if my son gets addicted to virtual pinball, dont you think that my son would tell his friends about it? And that opens the door of him or his friends buying a real pinball table (when they can afford one). All virtualization does is open the door to those that would have never experienced it in the first place, which in turn, creates more of a demand.
As long as the community sticks to the 3/5 year rule, people already know those tables, and would buy the real thing regardless, if they wanted, therefore not hurting sales, because those 3/5 year machines would no longer be in production. If you have a warehouse full of pins to sell, wouldnt someone want to play test a pin first before they decide to buy it (unless its a new pin)?
Basically this "fake" agreement was made for other reasons, because its obvious that Stern isnt bothered by emulation, as far as we all know.