This is very neat!
Some parallel thinking here, but it feels like it should be possible to build a software only version of this running entirely on a smartphone.
Take a picture of the GameBoy screen, and the app reconstructs the source image. It's only 128x128 2-bit depth pixels after all - the information content there seems well within the bounds of what can be reconstructed from a modern high resolution smartphone camera sensor.
Would be a cool computer vision project.