Basically I2C uses two wires and allows you to connect up to 128 devices to it without any complicated wiring.
The extra cost would be a couple of dollars. Something small like a ATtiny2313 would be suitable for most shields and its dirt cheap.
Plus DIP switch or something to select the address of the shield.
Its a great protocol. The Wire library makes talking to each device really easy as well.
You just say who your sending the data to and it handles the rest.
The real advantage is that you can never run out of pins and that you still get all the special pins (SPI/PWM/Serial/etc).
It would also simplify connecting shields and using them.