To add to the above, an ips file is a patch format that is incredibly easy-to-understand and create with just a hex-editor that a romhacker would likely have been familiar with at the time; or to create a tool to make or apply it.
In cases of most romhacks, one will just overwrite parts, and have none of the original ROM being in the patch itself. Thus, it
seems to a non-lawyer (not that I'm one) to be less criminal. This would apply to other patch formats more so; as they have, say, the capability to include "move this block there". Unfortunately, a patch remains a Derivative Work, so...
It can require very little in the way of changes to alter features or add minor bits, or perhaps enable hidden debug menus. The Game Genie was, after all, a three-byte patcher.
And yes, even now, you'll find people on dial-up...or, on cell-phone plans with tiny data allowances or straight-up per-bit charges. There's always someone. (Regardless, just because you CAN use more space doesn't mean you SHOULD..."40k should be enough for anyone", right?
)