They've done it before. I can't remember the exact FW, but it was to stop clone cards using Gateway FW.
More like pissing off the consumer and you can't do a thing about it since it is classified as a pirating device..............
Its a huge gamble.
THE BEST METHOD to run PSX games (and everything else for that matter) is via Retroarch - http://buildbot.libretro.com/nightly/
If you have any questions on how to set it up on Windows please feel free to ask, its very easy.