First, you are correct in the you do NOT want to mix grounds between dreamcast and I-PAC. But between two dreamcast pads its ok if you share the grounds.
The only reason why you may want to seperate grounds between hacked pads is if you are using two seperate connectors (like a pair of molex connectors, one for each side). If you are wiring both player sides to a single db25 connector, then I think thats fine if you chain around a single ground.
Here is a pic of my control panel wiring with two molex connectors. Both sides use the exact same pinout, each with their own respective ground. Much cleaner wiring in my opinion.
