Very nice! I love seeing emulator projects on AVR.
EDIT: Nevermind, I see you stopped using SD for RAM. (Or I misunderstood the original post)
You should take a look at the Teensy line of boards if you are interested in more memory and speed. They are compatible with the Arduino environment. The T4.0 is especially nice (600 MHz Cortex-M7, 1 MB RAM), and only $20!I did a similar project recently, but with 8086 on a Mega2560.
It's my accepted challenge: single Arduino Nano emulates i8080, acts with RAM & SD card, generates videosignal for TV Out, sends/receives data to/from serial (or from PS/2 keyboard with STM8 powered adapter).My "nanocomputer" in action:YouTube