Doing soft emulation of the sappy engine in an emulator should be perfectly possible, although definitely not simple.
Someone would need to reverse engineer the engine a bit further and look how the game passes messages to the sound engine, and intercept them, and passes them to an alternate sound engine based on MIDIs and SF2s. The problem is locating those message passing routines as they will have different adresses in each game and there is probably several version of them so looking at the binary might not be of much help.
However this sounds like a great idea, it'd fall into the "emulated game is improved over the original hardware" category. If some emu author feel tempted to do this I'd be happy to collaborate !
As for the quality of samples, they are stored in 8-bit, and the sample rate depends on the game. Even at high sample rate the quality decreases as bits are lost in the mixing process (or else you'd get buffer overflows). And most games uses low sample rates...
The main weakness of my system is that it emulates the PSG in a very lossy way, although the result sounds acceptable most of the time.