The point is, by ensuring that all contesting parties have a fair chance to score seats, you avoid two-party systems. By keeping a proportion between vote share and seats in Parliament, you make sure it really represents the voters and not a distorted version caused by tactical voting. And by making it harder for someone to get a majority, you force parties to negotiate and compromise. This also prevents big hatred between sides- it's not like that there is ONE rival party you need to fight to death for power- instead, there are three, four other major parties you can -have to- cooperate with in certain issues, and, if one party is your complete opposite, well, you have other people you can talk to. It's not just black and white, but a world with blues and oranges and yellows in the mix.
But can't this system backfire? The French Fourth Republic fell in part due to parliament not being able to form stable governments. Now France has a run-off system that still lends itself to having two big parties. It's one thing to force parties to work together, but it's another to have them actually work together. That's no guarantee for negotiation and compromise, and having some government is better than having no government at all. Also, it can be difficult for a constituency to elect a member that represents them when seats are distributed by the proportion of the total vote and not by simple majorities.