When I pack all my sprites into an atlas, I still see a bunch of empty space within the atlas. eg, while the atlas tool packed everything into a 2048^2 image, I feel like this could be packed into a 1024^2 and a 512^2 image.
This becomes even more valuable when I have a very large atlas that needs more space than a 2048^2 image. A 2048 and a 512 is much smaller than a 4096.