What is the benefit of a larger disc rotor?
Simply put a bigger rotor provided better braking, and a four pot caliper provides better braking - better meaning more, and more control (Everything else being equal). 

For the same force between the disc and pads, a bigger rotor generates more torque on the wheel - i.e. more stopping force. It is running though the pads faster, generating more friction for the same pressure, more stopping power, and as it has bigger surface area, is dissipating more of the generated heat, meaning the disc and pads run colder. So, for the same caliper and brake pad, a bigger rotor generates more braking for the same pressure or the same amount of braking for less pressure. 

The disadvantage of a bigger rotor is weight and as its larger, more prone to warping and distortion. 

This applies to all disc brakes from bicycles to aircraft...... 

For a bicycle, there comes a time where you have "enough", and quickly get to "too much" - with high quality equipment its a surprisingly small disk for most people. Big disks a more prone to warping and damage, which is a good reason not install them unless you need to.

Heat buildup is not normally a problem but low end pads can suffer fad. Small rotors don't typically over heat on bikes (Tandems and loaded tourers might manage it). The main advantage is more breaking for less pressure - so you get more control and feel, and your braking hand tires less (If you have ever done a 1000ft vertical descent in technical tracks on crap brakes you know the feeling) 

A 4 pot caliper provides advantages of more and more even pressure, meaning better braking. Also as there are usually larger pads - more heat dissipation can be achieved.  

Note: A 29'er would usually need a bigger disc than a 26" wheel for the same stopping power. 

Don't forget the pad and disk material - these can make a bigger difference than size, but its not as visible. Do not go to big discs and 4 pots unless you are already at the higher end of the quality spectrum.

Edit: I recently saw some discussion regard discs on road bikes, and some basic physics indicate over heating is a major problem with hydraulic disc brakes and descending large heights (100's of meters vertical) causing the fluid to boil. Extra cooling from a larger rotor would help, but is likely to be just a small part of the answer.