This is pretty much why I think modular from day #1 on a project. When you consider the low cost of PIC chips, I don't mind having a PIC that scans a keyboard, another slave outputs to a LCD and have a master send/receive data via USART at 115,200 using Darryl's interrupts. It's robust, proven and works over long cable lengths.

I used I/O expanders when I first started but it's not even worth it any more. Today, a PIC costs less, runs at 64MHz, has waaaay more pins, can use complicated I/O logic (charlie-plexing) and can still do any of the features available on that model PIC. Much more bang for the buck.