Many larger games come in NSP or XCI files that are bigger than 4GB. Way back when, if we wanted to install a game to a modded Switch, we'd copy that file from the PC to the SD card, boot up the Switch and install the game from it, deleting it after the installation. To be able to install NSPs larger than 4GB, we'd have to split them into <4GB files, put them in a folder with a name that ended in .nsp and which had the archive bit set, and copy that to the SD card instead. Not too complicated, but a bit time consuming.
Nowadays, we can install NSPs via network, MTP, thumb drive/external hard drive, for all I know Bluetooth installation is somewhere over the horizon, so copying NSPs to the SD card isn't as popular as it once was, but having done it a lot, I can tell you that the 4GB limit is very much a downside.