This conversations really more about barrier of entry than anything else. Say what you want about waggle or the wiimote but anyone from a toddler to a grandma to the girlfriend or boyfriend who 'doesn't play games' can pick it up and have a generally intuitive sense of what to do with it and how it works. Making the controller familiar to people who have picked up television controllers was a subtle stroke of genius and the barrier of entry is extremely low.
The Xbox 360 controller has an extremely high barrier of entry if you're not already a gamer. Handing a 360 remote to my mother is like handing her a lump of salted cod and telling her she can't drop it.. it's a kind of limp wristed disdain mixed with a mild overwhelming feeling. The dual control sticks are rocket science if you're not used to them, and four different bumper/trigger combos are a whole 'nother level.
Developers who know how to create a solid control scheme can do so regardless of how many buttons there are, there are ways to solve those problems. But the other direction, that complexity and barrier of entry, that's way harder to reverse engineer for those people who just want to pick up and play. Input mechanisms will continue to become more streamlined for this reason... just look at your average gadget like a smartphone nowadays; it has about 1/8th the buttons and gizmos that it used to in favor of a seriously streamlined interface. Just watch what the cutting edge industrial design community is doing today and has been for 5 years to see what the big 3 console manufacturers will probably be doing 5 years from now.
