It's a tradeoff like any other. Just because there is a possibility of playing with the controller sideways, it doesn't mean every other feature has to work simultaneously. The sideways mode is mostly for virtual console titles from what I know, I doubt IR pointing will do you much good there.

So we come to back to those buttons being in bad positions for normal use are okay because you "mostly use them holding the controller sideways for VC games."

I think Windbane is largely correct here; the graphical requirements and controller style will vary from genre to genre, game to game. For example, I think most RPGs can be played with fewer buttons, as can Grand Theft Auto style games, but MMOs, RTS and fighting games all require more. Some genres use motion sensitivity well (sports, FPS) some don't (fighting games). Some genres really benefit from improved graphics (FPS, Racing sim) some don't benefit much at all (outside of FF XIII, most RPGs are sticking with an anime style, for example).

It just depends on the genre and the style of game. The Wii was clearly intended to make games simpler to understand and easier to play -- crying "it doesn't have enough buttons!" is equivalent to saying "The Wii design philosophy is wrong!" Perhaps it's not right for you, but clearly lots of other people prefer the Wii's control scheme and gaming philosophy.

Personally, I like the Wii Remote for simpler, casual stuff, and I like the Keyboard/Mouse for more complex fare. I could easily turn this "Wiimote doesn't have enough buttons" argument right back at the PS3/360 controller; I absolutely laugh at the notion of playing an MMORPG on any of the three controllers, because all of them don't have enough buttons. 15-20 buttons just isn't coming close to cutting it in modern MMO design. So how many buttons is enough buttons? Is there a point where we say "this is too much, we should have less?" Obviously, for many people, the answer is "yes there are too many buttons, not just on the keyboard, but even on the traditional controller," and it is those people for whom the Wii Remote was designed.

Yes.

Because a game is on the Wii and uses the wiimote doesn't mean that the controls will be the best ever. Look at Red Steel and I'm sure more then a few other games with wierd or awkward controls.

It all depends on how the developer inplements the controls and how well it works.

Red Steel was a turd. A huge stinking ugly turd of a game.

So was Lair. However lair was at least a beautiful polished turd.

But there are other games that will work perfectly fine for the DS3/Six Axis controllers and very very few genre's of games that cannot be easily manipulated or used by using those controllers.

For the Wii though, there will be certain genres that will just have piss poor controls because of the wiimote unless you get a second GC type/style of controller to use for the game. And you will see more games that do not use the motion controls correctly on the Wii then you will for the PS3.

Tell us more about those "certain genres".

I think there's a fair amount of truth in this at least that different genres will naturally take better advantage of some features.  The fact that the most anticipated controller for Super Smash Bros. Brawl is apparently not the Wiimote, but the Gamecube controller is very telling.

Players recognize that the Wiimote is inadequate and developers do as well.

I'll never understand why there are so many Wii owners who refuse to see Nintendo's little innovation has some major flaws in it.

 Fighting games and MMOs are the first two that come to mind, for me. 

Why MMOs?

For certain genres, the only one where it really hurts it (as far as I can think) is fighting games. For other genres, such as sports, FPS and point and click games it makes the game hugely more immersive.