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I agree with the first part of your message but a 401(k) can indeed allow for higher contributions in many situations. Keeping it simple, assume a corporation with one shareholder/employee with $80,000 of W-2 income. Profit sharing contributions (or SEP*) would be 25% max or $20,000. The 401(k) could be layered on for an additional $19,000/$25,000. It's only when compensation exceeds 25% of the 415 limit ($224K in 2019) that the 401(k) adds nothing, except if over age 50. *What is really inefficient is using a PS plan instead of a SEP. A SEP gets you to the same place with no reporting...unless you are talking about different contribution rates for different participants, then you do need a plan. (I see RBG just beat me to it with a more efficiently worded post.)

You are assuming that there is enough comp to max out using just profit sharing, that is often not the case. For many of these small companies, you don't have enough comp to get to $56K as a profit sharing contribution, but you can get to $38K and max out at $56K with the $18K deferral.