If i'm not mistaken shapeshifter (with proper driver) can use the HAM modes to emulate 16bit color MAC, and it was not that bad.
Yes, indeed it could (I even wrote a driver for it), but the mode had its issues - the typical tearing problems HAM causes.
The reason why that "works" is that you have - within Shapeshifter - a "blue print" of the image you want to render, i.e. basically you double the required RAM for the framebuffer.
This makes this mode quite unpractical for any serious image processing. As said, its main use was displaying images and "looking nice", but not so much to run any serious image processing or applications on it.