The GC's are doing it for ONE reason only.....to put as MUCH profit in their pockets period!!! They are doing as little as possible to meet MIN building code!

To be able to say something meaningful about the use of these two building techniques in your area we would need to know the climate, the size of the house in terms of width and height and the wind and earthquake zones.

The building codes are minimum requirement and apply to most situations but it they are quite adequate and in the more extreme situations a structural engineer is required.

Zone 3 North Louisiana is my area and most of the homes are around 2300 sq ft heated. It sure seems to be the rule and not the exception.

I doubt the use of insulating sheathing alone would be code compliant lateral bracing for a 2 story house in your area. I am surprised that full structural sheathing is not required in a tornado zone. Are most of the houses masonry clad?

All of these homes are brick. So if osb is used for the outside, do you just then rely on interior for insulation?

The rigid foam exterior provides a thermal break (eliminates a continuous non-insulated connection from exterior to interior at the studs) and increases overall insulation. The OSB or Plywood corners provide the structural (racking, resistance against falling over) strength.

I would prefer to build our house with foam sheathing like you describe, but it's uncommon where I live and I'm relying on the experience of my subs to get the job done right. I can't teach my framing crew how to do something based on my 'book' knowledge.

The foam board is minimally insulation, you would still need insu. in the wall from inside. If you can, the best practice is to use OSB and then install the foam board on top of that.