The RetroN 5 plays real, vintage game cartridges, and lots of them – NES, Famicom, Genesis, Mega Drive, SNES, Super Famicom, Game Boy, Game Boy Color, and Game Boy Advance. And it uses the real controllers for those (except for Game Boy, naturally). But it also supports save states and other emulator-style functions, and outputs in HDMI. Whether this is a good thing to you, or whether you think it waters down games unnecessarily, is a matter of your personal convictions. You have to search within yourself.
One issue that is a little easier to come to a decision about is compatibility. Most new retro consoles use modified versions of the original hardware – the so-called "NES-on-a-chip" that allows for inexpensive NES compatibility. These don't quite play the full range of NES games perfectly; most are famously incompatible with games like Castlevania 3 which use extra chips on the cartridge. The RetroN line has purportedly improved NES performance, to the point that Castlevania 3 works, but the point is that it's not 100% perfect. Maybe you won't ever notice! But the uncertainty is there.
Unlike a real vintage console, though, you're a lot less likely to have failures. Pretty much every American NES has a terrible cartridge connector that needs replacement, and sometimes you have to jam another cartridge on top of it, or hit reset a few dozen times, or try to plug your cartridge in through a Game Genie, or wiggle the RF adapter, or something else to get it to work. Being brand new, a Retron isn't going to have any of those reliability issues. Probably.
The major advantage this has over something like the Wii Virtual Console is software. If something has been released on one of those systems, ever, you can play it. You don't have to wait for it to be re-rated by the ESRB, the rights acquired again, a publisher to put it back out, etc. If you can find a copy of the game on eBay, you can own it.
Conversely, in a weird way, the software lineup is also a limiting factor. You have to find used software. There's no infinite resource of copies available directly in your home like there is with PSN or Virtual Console. That means that if a game is rare, it's going to be more expensive and harder to find, whereas prices are pretty even on download services.
In conclusion ... I don't really have a conclusion. Like with the Neo Geo X, the value in this device is most apparent when I step back and acknowledge that consoles are basically toys, and therefore wanting to play with it
is its own justification. There's no objective way to say whether this is preferable to real vintage consoles or emulated versions on modern devices. There's room for the Retron 5 in the world because there are people in the world who want to play it. It exists in the small space between pawn shops and Virtual Console. Yes, that sounds like a cop-out, but that's the luxury that comes with writing opinion pieces about old games instead of issues that really affect people's lives.
Personally, I still don't know how I feel about it exactly. I covet my vintage game consoles, but I also covet the space in my house, which is rapidly diminishing. I can definitely see the appeal of parting with some old hardware in exchange for an all-in-one device.