The reason Gunatlet is two player is because the first Gauntlet did not let you select your character on the 4 player cabinet. Player 1 is always Barbarian, Player 2 Valkyrie, 3 Wizard and 4 Elf. Only the two player cabinet version of the game allowed character selection (and not the same character, as they didn't have color variations). If they put in the 4 player cabinet version, only Barbarian and Valkyrie would be playable. Selectable characters (including same character and color variations) on 4 player was added in Gauntlet 2.
It's the same reason I put in both the 2 and 4 player versions of Simpsons, Turtles 1 & 2 in the cabinet I made. It only has controls for two players, therefore it would limit your ability to play Don in Turtles, and everyone knows he is the best. I do, however, have USB ports for using external controllers so 4 players is supported if the need arises, but most of the time I use the 2 player version to get character selection.