Yes, that specific patent has expired. However, it was renewed each and every time Nintendo brought out a new console with the same cross design for the dpad. That patent is now currently for the WiiU and 3DS which still use the same design. Hyperkin can't copy it without risking legal action.
I bet a large number of people who will eventually buy a Retorn5 will have never heard of it until they come across one in a store, just like the NeoGeoX Gold and Atari Flashbacks.
Convenience and space reduction. Those regions are BIG. Most people don't want five consoles with five connections and five power supplies. They want one console that does it all. The biggest analogy is the Ouya, which is a tiny little rubix cube sized thing that does a whole lot of things.