I do several repottings but mainly to save space. Along with over a hundred peppers ,I will have eggplants, tomatoes, flowers, herbs, cukes, etc. and I move them to the next larger size as needed.

I like the fact that I can grow them deeper and deeper into the soil every re-potting. It definitely helps with the sturdiness. It also helps with the lighting situation to keep the plants as low profile as you can. I have only got 2 72 inch racks with limited head-room per shelf. I also like that I only need to use minimal amounts of lights and turn on more and more as the plants grow bigger and need more room. I got pretty much all of my lights going at present (12 shop lights with 24 tubes), but I've got some room to re-pot most of the rest of the plants into sufficient size pots before I have to get them into the final pots and the garden.
My current re-potting scheme is: 72 cell trays, into 2.5 inch pots, then Styrofoam cups. I do put the bigger ones in 6 inch pots when they start looking uncomfortable. I will keep the ones that look pretty content in Styrofoam cups until its time to go outside.

I tried 20oz. cups instead of 16oz this year and in my opinion that is a bad idea. The 20 are just taller, which means that they are taller than my 6 inch pots. That pretty much means that all my Habaneros I planted 7th of January look like I grew them on a hill. They are just too cumbersome to water. I went back to 16oz as soon as I saw the problem and I will use the 20's for other things. My Habaneros would not have liked me very much if I tried to confine them in cups :) They are all in 6 and 8 inch pots, and will go into 12-14 inch pots when they go outside.

Yes, I definitely understand the advantages of small containers to save space. However, I'm beginning to think there is also the other advantage of root development.

In other words, going from seedling containers to 12 pots may not be a good idea.....

Keep in mind, I'm in zone 8 and take chances that those in colder climates would never take.