OK Me and my friend went over the DMCA. It basicly says you aren't allowed to copy protected programs / cd's and or break and protection unless for legal copying (backup) purposes.

There are Six exceptions however, here's one of them:
2. Reverse engineering (section 1201(f)). This exception permits
circumvention, and the development of technological means for such
circumvention, by a person who has lawfully obtained a right to use a
copy of a computer program for the sole purpose of identifying and
analyzing elements of the program necessary to achieve interoperability
with other programs, to the extent that such acts are permitted under
copyright law.

Therefor, crack me's ARE acceptable since the author is permitting you to crack the program. So my idea from above (Simulating REAL programs with crack me's) will work just fine.

I hope this helps some other people with their question(s) also.