The difference is in the presumed defaults.
If you hire me, my assumption is that outside of company/organizational problems/changed of some sort, you'll keep me around so long as I'm reasonably competent.
Contract to hire on the other hand , sends off a vibe of we'll probably hire you if you wow us. Which, if someone already has a job or has other good offers in hand, is not going to sound like a great deal unless it's a company/position they really want and are very confident they can do.