Even if you have a 4 player setup, the UIO has enough inputs to use for buttons when using the u360 sticks, and as stated already, with keypress encoding, you get more flexibility and compatibility. And also as stated, this would open up the u360 inputs to be outputs to plug in as microswitch inputs on the UIO, further increasing compatibility across other emulators.
But it really comes down to what you want to do. It will work with MAME and most other emulators as joystick buttons (and with the u360 mapping to emulate 4/8 way control). In my case, I used the buttons with the UIO, but didn't use the u360 outputs, instead using the P1 and P2 joystick inputs for my P3 and P4 sticks, which I couldn't use because I had both a trackball and spinner on the UIO, which then makes those inputs unusable. So it worked out I was able to connect 32 buttons, 2 digital sticks, 2 analog sticks, a trackball, and a spinner, all to the UIO (along with 31 RGB LED's) and use up all but 2 inputs and one RGB output on the UIO, and not need a separate encoder for my 4 player setup. This isn't something I could have done with 4 digital sticks.