The Xbox One could emulate 360 games but the PS5 can't emulate PS3 games? Come on, I was ok with that excuse for the PS4 but now we even have an emulator on PC capable of running multiple games, made by people on their spare time without all the access Sony would have.
You're thinking of it as in, "That's old, and new stuff is newer, so of course the new thing can do the old thing, easy." It isn't that way, unfortunately.
The way Sony did things with PS3 (and PS2 before it) was the hard way, with intense use of dedicated processor units that just don't have equivalents in modern processors, as well as unstandardized techniques that do not conform to traditional methods of producing graphics or gaming. It's the reason why game developers kept cursing Sony hardware back in the day for being so difficult to develop for, as you could achieve great results but you had to fight for every inch you gained with the hardware, balancing everything like spinning plates always. (In the PS2 era, it's a reason why Xbox and Gamecube ports could often come out nice when games were ported over, because all the super-hard work was done and the Xbox/Cube gave extra legroom plus more standardized approaches to accessing its hardware plus its more modern year-younger hardware... and also, some PS2 games still came out superior despite a leap in graphic abilities just in time for Xbox and Cube that PS2 didn't have. 360 was a little bit that way too, although it didn't have significant advantages or headroom the way Xbox did and like-like software wasn't all that different, but it was a more PC-like chipset and emulation is for the most part coming along easier, though 360 has some quirks too.) The end results, in the hands of elite-level developers, is truly amazing game displays for the era, but it's only possible thanks to the weird way the hardware could be pushed.
That isn't to say that these old games couldn't be "made to run" on modern hardware... they just can't be done the same way on modern hardware that's not made to work that hard in that way. Either the games need to be ported to current, normal-assed ways of doing things (sometimes without compromises, as, again, they did things the hard way, and not because they were trying to do things that would be forever impossible to do again, it's just that Sony's machines at the time didn't have an "easy way" in them,) or find some way to translate the particular aspects of the console to run on ways new machines can understand it without the new machine losing step ever in the handling. Normal emulation has a lot of "good enough, keep going" to it, where you the player don't notice how inaccurate the emulation is because most of what you see and hear and play looks fine, sometimes even better than the original. You stop losing the magic handwave trick once you get to these machines; now you have to find the way to really bend the spoon with your mind.