>Has this been done before? (Try not to throw plates at me if it has)

This is what practically every dongle in existence does. They have been 
around for years, the early ones not as complex as what you are suggesting, 
but as time went on they have got more complex to a point where they do what 
you are suggesting.

Look at rainbow Systems, Flex LM, and a number of other similar companies 
that provide both USB and Printer Port dongles. 

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