Not only does it allow you to take on larger jobs, but I think the average rate per hour can be higher. Dealing with larger jobs means that you are dealing with larger clients that are more likely to be able to handle a higher hourly rate.

TBH, greatly reducing the overhead of the process of acquiring clients is what sells me on the idea. As a consultant/freelancer, you bill a high hourly rate to make up for a lot of this overhead. A solid market for projects means more profit.