So, obviously hacked pokemon are not a new thing. They've been around for a long time. But now with pokemon bank, all the hacked pokemon of older generations can be brought forward (despite that I'm sure I heard someone claim that the bank had specific ways to detect such...). Or maybe hacks have been found out for the new games too by now.

Before Y, I didn't even care to examine traded pokemon at all. I wasn't into breeding, it was just to fill pokedex. And really, even now I don't care about breeding aside from some OCDness. I'm never going to 'compete'. But, entirely not coincidentally I suspect, as soon as the bank came out (and since I was now paying attention) I started noticing the hacks. Here's my stories:

First, it turns out I myself ported a hacked pokemon up from Pearl. I've already forgotten what it was, but since I was checking all the ported pokemon's IVs, it immediately stood out: all IVs the same, but not maximum and in a master ball. Pretty much the obvious standard for hacked pokemon.

The second turned up a short while later while I was wondertrading a bunch of leftovers from breeding. This one was a Mightyena, similarly equal but not maxed IVs, master ball and also just to finish the picture, level 100.

And then we come to maybe the most hacked of all... I was sticking some decently IVed pokemon in the GTS and asking for legendaries (as you do), and I've now got:

A level 1, shiney, all max IVs, pokerus, masterball Dialga.

So... good going on that hack protection I guess heh.

I believe Pokebank checks against hacked Pokemon that are not legitimate. For example, a Keldeo with Giga Drain or something. I think that from the way that a Pokemon is generated and stored in memory there is no way to check the legitimacy of a generated Pokemon other than to validate if the bytes line up with what is legal for said Pokemon. So yes, generated Pokemon are a thing and I don't think Nintendo will ever be able to prevent previous generation Pokegen'ed Pokemon from coming over via Bank. They may have added extra measures for Generation 6 but I'm sure that someone will be able to decipher the algorithm that Gamefreak has employed.

@fragor87: I've heard the same. It checks legitimacy but not for hacks. At this point I'm not sure Nintendo has the know how or the desire to really stop the hacks. It's a bit of a bummer but I guess it is just part of the meta game at this point.

Personally, as long as the pokemon aren't boosted to have unnatural stats or moves, they don't really bother me. I mean you could argue that hacking for shinies really devalues what a shiny is, but digital rarity is dumb to begin with.