Personally?
2 players, 6 buttons each, and 2 start buttons.
That's it. I enjoy Street Fighter so the 6 buttons are necessary, otherwise I'd only go with 4 for Neo-Geo fighters (I hated MK).
I also have my exit button on the CP in the centre between the start buttons (good 6" away from each), because it gets used quite often for game switching.
Everything else (page down, change emulator) is done with button+joy combinations.
I have a pause button inside which used to be the service switch and my coin mechs work for credits.
2 Joys, 15 buttons.