Like anything else, it comes down to a matter of preferences and choices and that will determine what you will do.
with 3 rail O, it was designed from the beginning to run in tighter spaces, even scale equipment has compromises. There is scale equipment that will run 36" radius curves, but that is the low end, whereas a lot of people on their layouts have curves much smaller than that (yes, there is scale 2 rail that will run in tighter curves, mostly small engines like small switchers, 44 tonners and the like). Obviously if you have a larger space then the curve size will be less of an issue for you.
2 rail O also has less made for it, in the scale world it is dwarfed by HO and N. MTH makes engines that can run on either track which increases availability a bit, but when I looked into O scale 2 rail equipment it is more limited in what is available. With 3 rail the top end engines are expensive, Vision line and the like, but there are also engines at the lower end of pricing , some scale, some semi scale.
2 rail isn't hard to wire per se, the only tricky part are things like reverse loops, but as others have pointed out they have solutions today for reversing polarity that are seamless compared to the 'old days', other than that they are comparable w 3 rail.
Yes, you can convert three rail to 2, but it isn't easy. Leaving out insulating the wheels from each other, another big issue is flange size. 2 rail scale, not surprisingly, have NMRA compliant flanges which in turn are reflected in the height of scale rail, the typical 3 rail track, whether tinplate, gargraves/ross, atlas or MTH, are typically taller than scale, some are closer to scale, others are way tall to allow the deep flanges of three rail to work. So that post war engine or rolling stock may not work well even if you could convert it, you likely would have to do something about the flange depth (the flanges, like truck mounted versus body mounted couples on scale O equipment, are compromises to allow running trains in tighter radius curves). Rolling stock is a lot more easy to convert, it isn't difficult to body mount scale couplers and replace trucks with NMRA compliant ones, or even potentially just the wheels), and obviously structures and the like are the same
O scale like any 12 volt DC system has the availability of DCC command control, which is a hobby wide standard, which is a big plus for it. The decoders and the command control system itself are open, so you don't have what you do on three rail where Lionel and MTH have proprietary systems. So you can buy let's say an Atlas engine with whatever DCC decoder they have and run it on your layout whether your command controller is Digitrax, MRC, etc. DCC functionality has improved a great deal, it offers a lot more of what DCS and Legacy have offered all along, but lacks some of the bells and whistles (pun intended). (And before someone complains, I realize that DCS has the ability to control TMCC via a TMCC track control unit, but it cannot control legacy only functions).
In the end, comes down to the various compromises we make in this world. If you have a relatively large space for a layout that can handle 36" or larger radii curves (or are willing to compromise on small I scale rolling stock and engines) and the realism of 2 rail scale appeals to you and the price tag doesn't scare you (I would say the same thing to someone who was only interested in scale 3 rail with all the fancy features like Vision line and Premiere MTH level), then 2 rail might be a great option for you.
If you don't have the space then 3 rail scale might be better because of the compromises that allow scale or near scale equipment to run on tighter radii curves (or rather diameter,as they measure it in three rail). I also will add that 3 rail track is not just the old tinplate (which can be made to look halfway decent), Atlas O, Scaletrax, even Gargraves when done right look really, really good, the third rail kind of disappears when you look at one of the better 3 rail layouts out there.
Also depends on what you want to model, assuming you could do either 3 rail or 2 rail, all else equal, because of the size of the 3 rail market you may be able to find equipment in the road names you want. If you are modelling something like the New York Central or UP, 2 rail could have pretty much anything you want, but with other rail names might be easier to find in 3 rail.
In my case, while I hope to make a relatively hi rail layout, the third rail and the tight radii and the semi scale equipment doesn't bother me all that much, for me the trains are partly about memories, partly about being a kid but also about building something nice, too. I will run scale and near scale equipment, but I also plan on running my old postwar stuff and have fun with it...but then again, if I get back into it, and somehow end up with a bigger space to use, I might think of 2 rail, as well, if I get the bug