I use 72 cells/ 1020 to start, and the main reason for potting up is the same as Oakley. In my environment, the extra moisture from watering a solo-sized pot would be too much for a tiny seedling because the environment is cool. Especially true for peppers which hate cold wet soil the worst. And space is also an issue.
But I can see how, in a warmer climate, it may just not be worth the extra trouble because plants are growing faster and the potting mix is drying out fast enough they aren't bothered.
What I have noticed about small seedlings in big pots, is that they are slower to put on top growth and seem to instead put more energy into small roots trying to fill all the space. But seedlings in little cell packs have only enough space to focus their root growth into a main one with branches, so you have a sturdy main root to start with, and strengthens further as you pot up.
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