OK, I can dig it.
Then explain the KeyWiz to me!
Ok, I'll give it a shot

Here's what I can tell so far:
The KeyWiz supports 2 sticks with 4 buttons each right out of the box, simply plug-and-MAME.
Well, a lot more than that, but without touching a single config file and ignoring the rest, this is true.
If you have a control panel with a different layout (let's use Gauntlet and it's 4 sticks 2 buttons each as an example) you have to program the KeyWiz, this is done by connecting it to your computer and running the software it ships with.
You can, but this is not the only way to approach that situation. You can also just configure the app to be compatible with the default key assignments on the KeyWiz. The only difference between this method and the one you will need to use with a keyboard hack is that it is an
option with a Keywiz, and a
requirement for the keyboard hack.
All that makes sense to me, then there's confusion :
1. If you program the KeyWiz does it load what you've programmed upon power up every time, until you re-program it, or do you have to use the Shazaaam button?
If you elect not to use the defaults of the KeyWiz, you can set up your system to automatically refresh the programming of the KeyWiz with the last uploaded set at boot time. No user interaction is required for this to happen and the instructions for the software tell you how to set it up.
2. WTF is Shazaaam! button all about? Are you telling me that people want to change their control panel layout in-between games? I don't get it.
The Shazaaam! button scares me...
Hehe, don't be skeered. It's just like a SHIFT button on the keyboard, but instead of uselessly turning little letters into big ones, the Shazaaam! button makes the same button on your panel into a whole different button you can use when you need to. Things like ESC, Enter, TAB, 5, 6, whatever, can be accessed through the same buttons you play your games on. Think of it as making your buttons perform "dual-duty".
The other thing you might be thinking of is the "on-the-fly switching" feature that is accessed with the Shazaaam! button. This just lets you "toggle" between your custom code set and the default "power-on" code set. This is useful if you primarily use the default set, but you have an odd application that won't let you re-program the controls keys. If you load this set into the unit at boot time, you can instantly change between the sets when you need to.
How could it be simpler than the 2 wires of a keyboard hack?
One thing that seems to be eluding you slightly is that you don't need to use a devices complex capabilities just because they are available to you. A dedicated encoder is no more complex than a keyboard hack, in fact, it's far less. There are no matrices to decipher, you can daisy-chain a single ground wire instead of running 2 lines to the box for every switch, and no worries about ghosting/blocking. And if you want it to behave like a basic keyboard hack , albeit with
none of the shortcomings, it can do that too.
From your write up:
Ease of use - the keyboard hack never needs to be programmed, it is as simple as connecting 2 wires.
As one who has gone through the ordeal of hacking a keyboard, there is
nothing easy about doing it or using it.
If you are chronically unemployed, need to practice up on your soldering skills and have no desire to go to the beach instead, then have at at it. However, after all that effort, don't expect the performance to be the same as a dedicated encoder. What makes a good keyboard can often be, and often is, a far cry from what makes a good game controller.
Another thing to keep in mind is that before MAME, there wasn't much reason to hack keyboards for arcade controls. Early computers with a gaming emphasis almost always had a joystick port of some kind, and therefore almost always used it. Games requiring keyboard input were mostly simulations.
BTW, the first
keypad I ever hacked was on my Colecovision in the 80's and I even did a complete arcade control panel based on the same for a local Pizza parlor that set up a projection TV in the back room. Big Screen Arcade. Hehe.
RandyT