>Cracking this dongle; wouldn't this be a federal offence in the US?

No. As of 2003 there is a DMCA exemption for "computer programs protected by dongles that prevent access due to malfunction or damage and which are obsolete". <https://en.wikipedia.org/wiki/Video_game_preservation#Legal_...>

Yes and in every country that adopted a copyright treaty with the US, so all of them except China

It probably is; and so is going 10 over the speed limit.