Ideally it would be a compromise of both.

If you look at like a mid-2000s Infiniti or Lexus there's a button for fucking everything but many of them will be set once and then never touched again, or maybe used a couple times/year.

Things like moving the seat or drive modes or changing system settings. Those things can be safely tucked away in a menu.

Things like climate control, headlights, wipers and particularly media functions you might use constantly and should be physical.

You can also combine the 2. I've seen this on like the Hummer EV and BMWs. Mechanical buttons that do whatever is denoted on the screen above them, and change based on context.

Touchscreens are mandatory for backup cameras, might as well get some extra use out of them.