Treating PS1 games as "streamable PS3 games" might avoid some of the hassle with licensing and testing, but if it was that simple, then why hadn't they done that already? One possibility is that their existing licenses don't include streaming.
Yes, to include it in a subscription needs to be licensed/signed with their publisher/IP owner.
I assume they didn't do it before because they saw in PS3, PSP and Vita PSOne games that the interest on PSOne games was too small to repeat it on PS4 or even to care about them to include them in PS Now, and that it was more worth to focus on newer games for PS Now.
I assume that now Sony has as global corporate goal to revamp their subscription services and online stores adding there -in addition to other things- more IP/content. So I assume that for PS Now/Plus revamp they'll try to put there all the content they can easily put there, even if the games themselves don't provide enough appeal. More like a quote targeted to inverstors and PR saying 'we added a gazillion games' or 'we have gazillion games' specially when comparing against competitors.
And well, specially if soon they release their cloud streaming on mobile and smart tvs this quote will be specially important when mentioning the news to non-hardcore players in a more mainstream, non-gaming media like newspapers or tv news.
If Sony has to negotiate streaming rights, then they might as well do it through the PS4/PS5 and lump in digital downloads while they're at it. I can't envision many (if any) publishers saying "no" to this, if this brings along a renewed opportunity to sell digital copies to new audiences.
To stream games that already were released as PSOne Classics on PS3 would basically mean to sign and collect the money. To release them as emulated local games would mean that publishers would need to do or pay Q&A. They also may be forced to design and implement trophies or stuff like that.
I also believe that Sony and other publishers must have made some money on at least some of the PS1 games on PS3/PSP/Vita, or they wouldn't have kept the program going for so many years.
They would have ceased their offerings much more quickly, like they did with PS2 games on PS4 (which was an initiative that they bungled for numerous reasons).
Sony didn't offer PS1 games for sale on PS4 during the last 8+ years. That was a mistake. Perhaps Sony is finally recognizing this error in judgment, and choosing to rectify it now. Better late than never!
Yes. But in addition to this, most PS1/PS2/PS3/PSP/Vita games with potential to earn money on PS4/PS5 that don't relay on potentially extinct licenses (as would be racing games using real cars, sports games using real teams/players etc) got ported/remastered/remade/emulated in a collection.
I assume they prefer to do this because it may be more profitable for them than to keep selling separatedly emulated PS1 or PS2 games.