I thought IceCold's idea would have been great. Switch the d-pad with the x/y buttons surrounding the A button, and my concerns would go away. The only thing different is placement. Nothing is added to complicate it.
The only reason I can think of to keep the D-pad there is that it is more visually appealing. Functionally, however, using a d-pad for actions rather than movement has always been awkward to me. It would be fine for something like weapon swapping, but not on the fly actions. Going from A to a d-pad direction would be silly when, like Ian, I am used to resting my thumb between buttons for immediate reaction.