Yeah you make a good point, however the “spending less on legitimate products” argument would only be applicable to Nintendo if a given person were to buy new sealed product, otherwise they would be buying product from other third party sellers, products which Nintendo already saw profit from long ago. I definitely agree that Nintendo has legal grounds to sue, I just don’t think that hurting Nintendo’s profit margins/infringing on copyright is the synonymous with hurting the hobby. The hobby is fueled only by the drive of collectors and players to partake in it, IMO taking trivial money away from Nintendo means fuck all(of course if it posed a serious threat of ending the production of new Pokemon cards then it would be a different story, but a few people making custom cards is laughable in the face of a multi-billion dollar corporation) If a collector wants to buy an openly unofficial card because they like the art, I think it should be their choice to do so. If Nintendo wants to sue and put an end to it, they’re also free to do so. As for the idea that it’s “One step closer to counterfeit cards”, there’s already plenty of people making semi-accurate counterfeit cards which DO genuinely hurt the hobby, I don’t disagree that counterfeit cards are cancer for the hobby, but technically anyone with acetone and a printer is the same “small step away” from making counterfeit cards. Going hiking is a “small step away” from willfully jumping off a cliff, but we don’t assume all hikers have that intention, nor do we assume that hikers are inspiring others to jump off of cliffs, IMO bad apples are solely accountable for their own actions.
@gottaketchumall laid out the legal aspects, which tend to fall on deaf ears in pokemon, as a good chunk of the hobby is still young. Also something like custom cards, at their current low end are probably negligible for Pokemon.
IMO regardless of the legality, custom cards are completely pointless and counter-intuitive to collecting. There is no chase, hunt, or challenge in paying someone $10 to produce an illegitimate card. Trying to advertise them as “custom art” is also false. The artwork is typically a re-purposed illustration from Arita, Sugimori or another prominent illustrator.
In fact, the only reason “custom cards” sell at all is because they directly mimic their legitimate card counterparts. Who wants to own a literal bootleg version of a card? Especially when the price for most cards are not that insane. Even 1st Ed base holos in Pl-EX are affordable with a part time job and minimal saving.
There is no legitimate defense outside of, “its not that bad”. Which is understandable in the context of more severe issues in the hobby. Nonetheless it is still illegitimate.
Yeah I’m not saying the legal implications aren’t important to look at, I would just argue that they’re arbitrary in how this affects the overall health of the hobby. Moral objection to copyright infringement is entirely valid, I personally just don’t care all that much because it’s about as trivial as a mosquito biting a whale. Do you know how Pokemon artists get payed? Does Nintendo pay a flat fee for the work and then have the rights to it, or are the artists payed a commission based on how well the set sells? Just curious haha, I would have a moral objection if individual artists kept the rights to their art and someone else was profiting off of it, but if Nintendo entirely owns all of the rights then again it’s a case of a mosquito biting a whale.
As for the idea that they’re “pointless”, I disagree. There’s no discernible “point” to any collectible outside of peoples desire to collect it. I have no desire to collect sports cards, they serve no practical purpose and fulfill no desire for me, and so while they’re “pointless” to me it doesn’t invalidate the collect-ability and value that they have to other people. If even one person likes these custom cards and decides to collect them, then they become objectively “collectible”, regardless of their legitimacy. As for the chase, hunt, and challenge, there’s many legitimate cards that have none of those aspects. There’s no chase, hunt, or challenge in simply buying a single card on ebay that there’s 100 listings for. Outside of that, those aren’t the only reasons that people collect, imagine a collector who collects cards and memorabilia solely for artwork? To that collector legitimacy is irrelevant so long as there’s unique artwork, which the modified cards do offer(although typically not entirely unique, they are aesthetically pleasing, and graphically altered in a manner which actually does require a good deal of skill).
Anyways that’s just my 2 cents on the issue! I have no desire to collect custom cards anyways and so they’re “pointless” to me as well! I know I’m in the vast minority here arguing that they’re harmless to the hobby, and perhaps even add something unique, but I’ve always liked playing devil’s advocate 
I’ve seen these all over eBay recently and I have to say, if they actually used metallic paper or ink and the quality was good, I might snag a few myself.
But this is literally copyright infringement in all forms. It’s no better than buying a bootleg.