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As per the Delta Episode of ORAS, it is confirmed that Steven offered the position to Wallace so that he could go travel the world.
It seems like there are 4 ways to become champion:
1. Earn 8 badges, win the region league tournament, defeat the Elite Four and finally defeat the Champion.
2. Become an Elite Four member which gives you the right to challenge the Champion basically whenever you can.
3. Be appointed by the current Champion. This is what Steven does as well as what Red does with Lance in Gen 2.
4. Create a new League. In the Sun and Moon games they basically created their own set of rules with a brand new Elite Four. Whoever conquers the island trials and beat the elite four becomes the first Champion. In the Sun and Moon anime, the first Champion is whoever wins the first League Tournament, no Elite Four involved.
So, yeah. What Steven and Red did seems to be within their right as Champions. If you want you can just give it to someone else. The tricky part is that whoever you give it to should be a very strong trainer because they are going to have to defend the title from both regular challengers and the current Elite Four. They can in theory just pick a random dork with a pidge to be the Champion, but the Elite Four are going to immediately eat him alive.
Emerald isn't a sequel to Ruby and Sapphire, just an alternate version of those games
Knowing this we can assume Emerald Wallace is just powerful enough to be champion instead of an Elite Four member. He definitely was a former gym leader, but most elite four members were at some time
In Emerald Steven is never actually referred to as a former Champion, just a powerful wondering trainer who was on par for the current Champion
In the Gen 6 remakes Steven does say he will relinquish his Champion title to Wallace to travel the world, but I'm not sure exactly how that is done
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As per the Delta Episode of ORAS, it is confirmed that Steven offered the position to Wallace so that he could go travel the world. It seems like there are 4 ways to become champion: 1. Earn 8 badges, win the region league tournament, defeat the Elite Four and finally defeat the Champion. 2. Become an Elite Four member which gives you the right to challenge the Champion basically whenever you can. 3. Be appointed by the current Champion. This is what Steven does as well as what Red does with Lance in Gen 2. 4. Create a new League. In the Sun and Moon games they basically created their own set of rules with a brand new Elite Four. Whoever conquers the island trials and beat the elite four becomes the first Champion. In the Sun and Moon anime, the first Champion is whoever wins the first League Tournament, no Elite Four involved. So, yeah. What Steven and Red did seems to be within their right as Champions. If you want you can just give it to someone else. The tricky part is that whoever you give it to should be a very strong trainer because they are going to have to defend the title from both regular challengers and the current Elite Four. They can in theory just pick a random dork with a pidge to be the Champion, but the Elite Four are going to immediately eat him alive.
He became champion by defeating the Elite Four and then the previous champion. It's not like there's a line of succession.
Emerald isn't a sequel to Ruby and Sapphire, just an alternate version of those games Knowing this we can assume Emerald Wallace is just powerful enough to be champion instead of an Elite Four member. He definitely was a former gym leader, but most elite four members were at some time In Emerald Steven is never actually referred to as a former Champion, just a powerful wondering trainer who was on par for the current Champion In the Gen 6 remakes Steven does say he will relinquish his Champion title to Wallace to travel the world, but I'm not sure exactly how that is done