It would be extremely unusual for a candidate to really want to do the contract-to-hire route rather than joining as a full-time employee straight away. Normally, that sort of arrangement is done primarily to benefit the employer. Normally, the people that take those sorts of positions are looking for full time positions and accept something less than they want for much the same reason that people that can't find a full-time position often take a part-time position to get their foot in the door.
From the employer standpoint, while it's true that they can dismiss their at-will employees at any time if they're not working out, it is psychologically much less taxing on managers and other employees to not renew a contract than to dismiss a permanent employee. When a new employee hire isn't working out, managers are much more likely to ignore the situation hoping that performance will improve or to go to heroic lengths to try to fix the issue rather than having to call someone into a room and tell them that they're fired. On the other hand, if a manager has to make a decision at, say, 6 months whether to hire someone one or decline to renew their contract, it is much more likely that they would be willing to part ways with someone that wasn't measuring up.
Declining to renew a contract also has very different impacts on the morale of other employees. When a permanent employee is let go, there are often immediate questions of whether the company is laying off staff or running into financial issues. Contractors, on the other hand, can generally come and go without generating the same sense of worry because that's the nature of contractors.
Other factors like savings on unemployment insurance, not needing to pay for health insurance or make retirement contributions for a few month, etc. factor in as well. But these are generally secondary concerns
