Like most things, its not 'either/or', it's a continuum.
On the one end you have the player that makes a one-legged, one-eyed pirate with max ranks in Profession (Sailor) for a desert-based game "because the character has personality".
On the other you have a player that combines 12 different splat books, 3 base classes and 4 prestige classes to create an uber undead slayer that wouldn't survive three minutes in a normal environment, and there is no remotely feasible in-game explanation for how that would all come about.
As a DM, I'd rather not have either. But if I had to pick, I'd take the former, because likely all he's going to do is regret his choices and ask to make a new character. The latter is going to be a constant pain in the ass. Encounters will have to be boosted to challenge him, which endagers the rest of the party. Every level-up is going to be an arguement about allowing some new potentially broken feat. He's going to irritate the rest of the players by telling them what to do in combat because they "aren't making smart decisions".
Then he'll get bored, too, and want to make a new character. Except whereas the first guy learns and moves a little towards the middle, the consummate min-maxer is never satisfied, needing ever higher doses of munchkinism to get his fix. Before you know it, he's demanding that he be allowed to make a half-dragon, half-troll with a Vow of Poverty. And at that point, you just basically have to put him down or kick him from the group.
Moderation in all things is key. If you entire group is composed of the same type, then you can get away with the extremes. But if you've got different players with different motivations for playing, the extreme min-maxer isn't worth the hassle. Fortunately, most people lie somewhere in the middle. Players with a sense of group responsibility and a modicum of maturity can adapt. Those with neither, I have no interest in playing with.