It depends. Where FPGAs excel is at using actual period hardware, such as CRTs and peripherals. For less powerful platforms, software emulation is quite enough for the casual gamer.
I can't stress this enough, however: the physical interaction with the device is extremely important. Even being a software emulator inside a physical C64 reproduction, the fact it's a tiny ARM SoC in there is irrelevant - typing on a physical C64 keyboard makes it much closer to any FPGA connected to a PC keyboard.
Sure, software-based emulators for old hardware exist, but miSTer and its community have clear preference for the FPGA approach.
And, of course, timing accuracy aside, where miSTer excels is in the ecosystem it has created. The overall UX.
The software emulator community is trying (with efforts such as e.g. retroarch) but isn't quite there.