I have no idea how people don't pull their hair out playing companions only. It's basically code for "solo everything". While it's absolutely possible to knock out entire parties by yourself even at the start of the game with the Jousting Lance, I'd rather not have to spend 20 minutes finishing every battle instead of 1 minute.
Small parties make sense (map movement speed is important), but not even including elite mercenaries/bounty hunters? Ehh, that might work in Perisno where you can heal yourself and your party during the battle with Y and U I suppose. But there are too many parties running around with large numbers to consider just going companions only (you miss out on the loot if you're too weak to attack them!), and the more people there are in your party, the more prisoners you can take.
If you attack a party of 400 with 200 men of your own, you get (speaking very broadly) the same loot as attacking a party of 40 with 20 men. But you don't get the same number of prisoners. A significant portion of my income early on was building up an army as quickly as possible and throwing it into constant fights, selling all the prisoners, replacing the losses, fighting some more, and continuing on like that.
While I could probably take on a large army of Volheere Raiders NOW with just me and my companions, I would have had an extremely hard time doing it earlier on in the game. Aracanus, Tamaris, Marcus, Dietrich, Tylen, and to a lesser extent Silivethiel, Antiope, Uldin and Shi Jin are strong from the start of the game sure, but you probably don't have the cash to recruit all of them - and they still only become gods of war once given real equipment, which you probably can't yet afford if you've just started the game. At least when you slap together a small army of Elintor troops to annihilate Volheere Raider parties, they're effective straight away.
Even when talking about giving them quick and easy solutions like giving them all Bladed Crossbows and having them dismount while you make the enemy infantry blob go in circles - that can't happen until you find a small stack of cash and a Magic Merchant.
...
Your strategy relies a lot on basically soloing enemy parties, doesn't it? Too much of a hassle. Yes, you can solo Zann Advanced Scout parties, Divine Aethlings, and Volheere parties with horse archery or a blunt lance, but it's so time consuming. The last time I took on a party of Divine Aethlings, it took me like 20 real minutes to knock out all of them. The money was great but... it's too much hard work.