I decided to go with illuminated buttons for my bartop, and I'm happy with that decision. I also wanted concave buttons and ended up going with ClassicRGBs from Ultimarc. They're a bit pricey, but I knew this was going to be the only machine I'd have room for in my house, so I was willing to put up the extra ~$70 or so that it cost to do the upgrade. I was using an Ultimate I/O Ipac, so this made everything easy as they plugged directly into (and were powered from) the Ipac.
I would argue that, especially for guests, they can have a positive impact on gameplay. From what I've seen, most control panels are built with more buttons than many games require (ie, I have 6 action buttons per player, but most MAME games only require 1-3 buttons), and being able to light up the specific buttons that are used can be helpful for people who don't play the games all the time. For example, LEDBlinky will automatically illuminate the correct buttons in the correct colors for games like Mortal Kombat, Blitz, NBA Jam, etc, so that people can follow on screen commands more easily; when the game reminds you "hit white button for turbo", you have a button that lights up white. I also think it's a cool touch that each game can replicate the button colors of the original cabinet...
Does it augment gameplay? Not really. But I think that it does have benefits and can look nice when done well with a well laid out CP.
As a caveat, this is assuming you're designing your own cabinet and artwork. I would agree with others that they don't really have a place on any machine that is supposed to replicate a classic design.