The benefit that I see in the arcade stick (which is my personal preference) are as follows:
Firstly, fighting games are fairly universally controlled with digital inputs. That is, a button is either on or off so you usually don't have things like different movement speeds depending on how much you're holding a stick in a direction and you can only input cardinal directions or their diagonals etc. Arcade sticks are really good at giving tactile feedback about this stuff. You can feel the microswitches in the stick, you have the feedback of where the stick is in the gate that guides it etc. Everything just has a snappy feel to it. Things like dpads tend to be a bit mushy in comparison. If you hit the corner of a square gate, you feel it. This feedback can be really valuable.
Secondly, you're doing the motion on a larger scale. You're not just rolling the pad of your thumb on a dpad or stick, you're using your wrists etc. By making the motion bigger, you're making the margin for error bigger. The flipside to this is that a bigger motion might take a little longer, but arcade sticks are durable, so you can be rough with them and really crank the stick through the motions etc.
I also think it's easier to use all your fingers on the buttons. If you watch pad players that don't use special 'fightpads' and just have whatever system controller, they seem to constantly shift their grip etc to help with whatever execution. The buttons on a stick are just all there easily accessed by your fingers, almost like playing a piano or something.
At the end of the day, it's all preference and part of it just comes down to that being the control method that the community was formed on by playing on arcade hardware. But it's also really satisfying to really hammer away at a stick and whack the shit out of those buttons.
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