Three reasons:

A 4 " pot holds a lot more moisture than a tiny seedling can use, which means it never dries out, and you are much more likely to get "damp off" or stress the seedling from to much water.

When you transplant tomatoes you can plant them deeper into the soil, giving them more roots and getting a shorter sturdier plant.

Also, from everything I have read, Tomatoes actually benefit from being transplanted, it strengthens their root systems.

Some plants take up water and nutrients better when there is a uniform soil moisture. Others do better when the soil cycles from wet to dry. I think it's a matter of what method the plant uses to pass water and nutrients through the membrane of the feeder roots.

Plants that like a changing moisture level tend to grow faster when the time between cycles is shorter. That happens when the pot size is appropriate for the plant size.

Most all plants benefit from at least one transplanting just like tomatoes. Transplanting triggers the plant to develop feeder roots - no transplanting = weaker roots.

Not to mention that trying to get a seed to germinate in a 4" pot of soil is difficult if not impossible. It's starting out with 2 strikes against it. If it germinates in the big pot than along comes strike 3 and rots its roots.

As always mentioned whenever this question comes up - which it does often - you have to do what is best for the seed and the plant, not what is best for the gardener. :)

Dave

Also, no one transplants into a seed starting mix, which is heavy with peat, drains poorly with not enough air in the root zone. Transplanting is best done into a bark based mix. Al

Thanks all. So I will use small pots (got a bunch of plastic 1" pots from home depot leftovers a while back) for seed germination. When they develop their true leaves, I will transplant them into 4" pots with potting soil.

Tomatoes, lettuce, and peppers are what I'm doing like this that I've read do well from transplanting.