It runs my ambassador GBA games pretty well apart from some slight blurring issues.
That's running in DS Mode and it has more issues than blurry image, for exemple: music bugs and even software bugs. Note that's emulating something that's emulated (3Ds running in DS Mode which is running in GBA compatibility - shit happens). Nintendo doesn't like it. NES, GB and GBC are the only thing the 3DS can run appropriately.
See also:
http://www.neogaf.com/forum/showpost.php?p=100695818&postcount=115
Basically Nintendo wants the feature of the handheld available and, while in DS mode, you lose all that.
It's not emulating them, though, it plays them in native DS mode (which is why they behave exactly like DS games on 3DS). That being said, it blows my mind that 3DS can't emulate GBA, I don't think that's the case at all. Even old open handhelds like the Dingoo could do it.
The problem with non-perfect emulation is that it rise issues within the games to the point where, if the game is not emulated perfectly, it can literally break the game. Nintendo doesn't want that to happen so they build, for each game, their own emulator. But the 3DS can't emulate them. This happens more often on underground/less known games than mainstream games.