IMHO, big monitors in arcade cabs are overrated. To me, a 19 inch looks big enough. I mean, you're standing right in front of it, so how big does it really have to be? Should be fine for 2 players.
However, there are some things to consider:
1) If you were a big fan of a certain game that had a big monitor, it may seem wrong to you on a smaller monitor.
2) If you have a big cab that's made for a large monitor, a smaller one might look wrong, like if there's a ton of bezel space around it.
3) If you're crazy about vertical games (assuming you're not planning a rotating monitor), you should probably go with the 26 inch. Using a bit of trig, you can figure out how big vertical games will be on a 21 inch monitor. Off the top of my head, I would guess they're about the equivalent of a 15 or 16 inch monitor mounted vertically. That's pretty small for a full size cab, and I wouldn't be happy with it because I love the vertical classics. The 26 inch monitor should give you something like 19-20 inches for vertical which is just right for those games.
I think if you have to ask the question, and none of the points above apply to you, you'd probably be happy with the 21 inch.