For me, its all about time investment; what am I willing to put in for what I want? Do I want a real Kalos/Hoenn born Blue Pentagon Pokemon with my TID/SID, TSV, perfect IVs and EVs, egg moves it can relearn, memories that actually occurred in game, in a Bank Ball, 4-day infected Pokerus, and a nickname? How the hell do I accomplish that and how much time do I have? Here's my take on the gray area:
In terms of Legendaries, I'm not going to soft reset a thousand times for 3IVs and a decent nature. I just can't. So, I'll inject a Legendary with a QR code or use a PowerSaves device to edit the IVs and Nature on something I've already caught. For instance, I QR injected a Legit Manaphy from HGSS/Pokemon Ranger, it appears legit and passes all checks, can battle online, and for intents and purposes, is a real Pokemon. But is it really?
I mean lets not forget Pokemon are essentially files data. But they're so much more and that's why we love them! So do I love my Manaphy? She can tank hits like a beast and pop off a Tail Glow and sweep like best of them. So, yes I do. Because for all intents and purposes my Manaphy is legit. Mission accomplished. Am I as attached as something I bred myself? Maybe not, but I'm getting there.
Because I also still breed pretty extensively with the end goal of creating a legit BR, competitive build for every breed-able Pokemon organized into my very own "head cannon living battle-dex", I try to keep my teams (at least with breed-able Pokemon) legit. With this goal in mind, I've been slowly researching movesets, desired natures, and egg moves, and strategies, from Smogon and other sources then breeding the desired Pokemon. I'm generally more attached to these Pokemon, since I've invested a great deal of time into them.
However, take the Alomomola I recently bred for example. I requested and requested, offered trades and PMs for a legit one, but never found someone willing to give me a HA female. So, I genned one from a QR code and bred it myself with a Hacked Japanese 6IV Ditto. I could have just used the one I genned and called it a day, but had this desire to for it to be "real". For intents and purposes, it was legit, BR, and I could grow to love it.. But it had to be "real" for me to eventually feel accomplished about my "head cannon living battle-dex".
But then, how "real" was my Alomomola really? It was born from a QR injected mother and a foreign hacked father... but I still love her because I bred her. She's got the nature I wanted, the moves set, IVs, and even egg moves she didn't need..I wanted her to have the move Tickle just for shits and grins. I can even nickname her, I made her and she's mine.
Again, Pokemon are so much more than just files you can generate... there's a weird attachment to the ones you actually breed. You can call them your own and send them into battle knowing you put time and care into crafting them and that's something special to me.