For things that you do regularly the button should be optimized to not be in the middle of a cluster. Ideally it'll be somewhere you can see easily (like on the steering wheel), and most importantly of all it isn't dependent on context. In my car I can easily turn on the aircon, or change the music volume, or answer the phone without looking away from the road because I know where the button is and one press always does that thing. On a touchscreen you always need to give it attention because the screen area changes what it does depending on what you've pressed before pressing that area. That is a huge disadvantage.

Your point about pressing a button not doing what it's supposed to is right, but I have to admit I can't remember the last time that happened in any car I've owned. Buttons not working isn't a common issue as far as I know.