Hey, couldn't we do an NSF2MIDI type option on an emulator? That'd be cool. You could make your own instrument definations and then be able to actually play the game with them. That combined with Sai2x and possibly a new pallete... games like SMB3 will be more like SNES ones.
It's been tried before. Turns out it's hard in the general case to recognize what constitutes a "note" based on just the writes to the PSG registers. Go download (say) the Silver Surfer NSF, listen to each channel in Festalon or another NSF player plug-in, and tell me how you'd pick out individual notes.
The most plausible way to enhance NES music using MIDI would be to make a mapper with a 16550 UART or other serial port controller and then ROM-hack your games to write a MIDI bitstream to the serial port.
Well, how does NSF2MIDI do it?
Poorly.
NSF2MIDI probably emulates the NSF, watching for rising edges on each channel's volume, and then generates a MIDI note for each rising edge. This might work for simple tracks from 1985/1986 that use simple music engines, but it wouldn't work well for later tracks from Konami or from SID scene composers that use huge pitch bends, arpeggios, echo, etc.
Which later Konami tracks would you speak of?