PS1 games look as good as ever on PS2, but IMO, all the later consoles display both PS1, and PS2 games just badly.
Especially upscale.
Putting aside bugs that need to be solved, emulators for PC, like ePSXe, and PCSX2 can upscale resolutions for those old games perfectly to the current standards, if emulators don't have any paticular issues with given games.
So, rather than a console with half baked BC, I would rather have PS2 Classic, with lot more horse power, that can upscale games as well as PC emulators.
For PS3, I still believe, buying the console is the best option to play its games, and I'm not sure if it would be possible to make new stronger version of it, that can make games perform better, such as having a higher resolution, and FPS...
I do however think the best would be to just release as much of HD remasters as possible for both current consoles, and PC.