Sony would be insane not to properly sandbox the emulator. No additional risk involved. If they won't allow DVD playback than you can be sure that hackers will use it as an excuse to hack the console and allow it.One reason I think it will be digital copies from PSN only is that they can obviously do the standard QA and do things like adding trophies, but also they could to a certain extent minimize the risk of exploits that may be more possible with open emulation of discs.
From a business perspective disc based emulation is probably creating extra work, additional risk and providing no additional (direct) revenue.