The music is an indisputable barrier to release. There are clear violations of copyright. However, while the music is awesome, it's just music. It could be replaced easily.
Supposedly graphics are a concern, too, but I really don't believe that. Even if the Beatles had a song called Yellow Submarine, they don't have the concept of submarine painted yellow copyrighted. Same with the Runaway Five's similarities to the Blues Brothers. You can't copyright tux and sunglasses. I could go on stage like that tomorrow if I wanted. No problem. Plus, imitation with the intent to parody is legally acceptable.
In my not so knowledgeable opinion, the music is the biggest barrier to release and the easiest to fix. Supposedly Nintendo of Japan doesn't agree with this though and refuses because they have much looser copyright laws. I think that is baloney, though. Otherwise, why doesn't Japan have Earthbound on VC, too? They clearly aren't holding games back (those jerks
).
Even if they are going to get sued, they would most likely win most of the suits, and they can afford the court costs for the sake of keeping a promise.

