ended up flashing the pi3 version and setting up ssh and it seems to work well now.

thank you everyone for the help!

@mitu xboxdrv is not installed. I've created a new topic for this issue.

@koldar try re-enabling the usbromservice from the setup script just for kicks. And when plugging in your USB wait a little longer, perhaps reboot the pi as well with the USB in if it still doesn't copy over. If it doesn't at that point if you have a keyboard you can check the filesystem, or if you have it on the network you can transfer ROMs that way