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Chrizum said:

You're bonkers! There is a special place in hell for people who control analog sticks with any other fingers than their thumbs.

Yeah, it looks weird but the fruits are the fruits.  Holding this controller this way has allowed me to beat competitive gamers at certain games on the N64.  I know this one guy who placed 3rd in a Dota tournament held in a city with over a million people, and I was able to beat him repeatedly in 1x1 Smash 64 matches using Ness as my main.  I basically cannot even get a KO against him in the later Smash games using the standard grip with the Gamecube controller and he kills me in basically every other game that I have ever played against him.

You can't use this type of grip with the Gamecube controller because it has a more standard type analog stick that needs to be moved further to get a response and the three fingers are just too slow: the thumb works way better.  That said, really slight movement of the N64 analog stick produces very effective responses and the three fingers helps to steady against over-movement or movement in a slightly wrong direction.  It's also a stiff analog stick that doesn't move all that easily (especially compared to the Gamecube controller) and so the three fingers allows you to apply a lot more force with less effort.  Finally, the surface area of the stick is really small and it is fairly slippery and so the three finger clasp allows you to change directions without having to move the position of your thumb and it gives you a good clamp on the stick that never slides off.  Also, because the stick is so small, the three finger hold feels really natural (the head of a modern analog stick is way too big for three fingers to feel comfortable).

I guess what I am saying is that the N64's analog stick is highly non-traditional and many say that it hasn't aged well.  That is why the Brawler64 controller that people recommend using today has the proper ball-style analog stick that is also found in the Gamecube controller.  My argument is that the N64 has a good analog stick but people should consider holding it in a non-standard manner to get peak performance out of it because of its weird design.  I would never recommend holding a Gamecube controller in this manner.