For one thing, this indicates that Apple is feeling much more secure about their software.
People used to complain about having to reset WinMo phones. Yet, especially at the beginning, Apple knew their code wasn't perfect either.
So Apple came up with what I think is the most brilliant design innovation ever: put the "reset" button front and center, and make the user click it all the time! It was an example of hiding something in plain sight.
By using a physical button, Apple's engineers were assured of the ability for a user to easily get out of a stuck software loop without having to poke into a tiny hole or take the cover off. It was insanely clever IMO.
As for needing two buttons, no they could do like other devices and let a long press on the physical power button bring up a menu of what you want to do: reset, dfu, power off, etc.