Combine this with the SLG and you'll really have something, though it will require you to resize the image, and depending on how that's done, you've just added a frame of latency.
Combine this with the SLG, AND(!) support 120hz LCDs and implement alternate frame blanking to improve the LCD performance, and I'll give you $100 per unit. This will either add 1 source frame of latency (16.6ms) or 0.5 frames of latency (8.4ms), I can't quite work it out in my head. Seems that while you're drawing the previous frame for 1/120th of a second, the game would render half the next output frame, and while you display a fully blank screen for 1/120th of a second, the game would render the second half of the currently valid frame. The rendered frame will only be on screen for 1/120th of a second, but that time will begin AFTER the game has written the video to screen, so 0.5 frames of latency.
The proper solution for this is probably to actually reproduce the arcade hardware in an FPGA and drive the video that way. 0 frames of latency, and you could do all the per-line conversion you wanted, though if you chose to support 120hz LCDs, the same 0.5 frame latency would be introduced. Overall, with MAME itself often providing 1-3 frames of latency, 0.5 frames ain't too shabby.