I believe it's possible for Sony to develop a software PS3 emulator for PS5 since emulators we have access to are from devs without the access to source codes.
With all the documentation and source code, which Sony has, it's probably only a matter of effort.
And that's the biggest sticking point, why should Sony as a commercial company put time, money and effort into work and an emulator that only benefits us, the customers who have already bought the Ps3 games anyway? From their point of view, remakes and remasters would probably be much more lucrative.