He means you don't know what the program is doing and can't change what it's
doing, though I wouldn't go so far as to compare this to a virus. Nonfree
video games have had malicious features for a long time, though, especially
DRM (Nintendo in particular has always had a love affair with DRM).
Old video game consoles (pre-6th generation, along with the Gamecube)
actually are so tightly integrated that calling them "computers" is a
stretch; they don't have any sort of hard drive or software you install. Any
software is contained on ROM. Technically, it's enough to classify these old
consoles as mere circuits. I don't know of any way this reasoning can be used
to excuse emulation, but let's just assume it can be.
Still, I'm not comfortable with giving nonfree games made for dedicated
consoles a free pass just because we can technically call them circuits
instead of programs. One reason is the long history of DRM being used in
video games and video game consoles. Another, more important reason is that
these old games were developed for the same purpose as modern nonfree games
that clearly are computer programs; the only reason we can exclude the
machines they ran on as computers is because of the technology at the time.
It just seems like too much of a robot mentality to say that the Atari 2600
version of Frogger is OK, but the same game on personal computers of the time
is not.
On a similar note, I don't think playing arcade video games results in your
freedom being compromised; you are not the owner of the machine, so what goes
on between you moving the joystick and Pac-Man downing pills doesn't matter
from your perspective. Still, I don't like the idea of using this
technicality to say Street Fighter IV is OK in arcades, but not OK on the
PS3.
In summary: I think you're right. Technically, these old consoles don't count
as computers, so I won't criticize you for playing those games, but I don't
like the distinction because it seems a bit too artificial. The same applies
to arcade video games.