It is going to be a downloadable game almost for sure.
From the site:
"As always, we respect Sega’s copyright ownership of the Segagaga name and license. Our work is unauthorized and will cease at any time at Sega’s request."
Still, I doubt Sega will stop them. Sega has let projects like this go on without any hassle before.
I'm also not sure a VMU patch is even possible.