Torque to yield

Whats the bennefit of using "torque to yield" bolts, instead of use bolt of better material or a size bigger to get the same Clamping Force?

Save space? Cost?

I would surmise it's so manufacturers have a more consistent clamping force from the fasteners, as they will have max'd out their elastic range.

I did learn the definitive reason, but simply can't recall it.

What you are trying to achieve is the correct tension. Torque is a very poor indicator of bolt tension. From memory about the best you can expect on car-sized threads with typical conditions is about +/-30% tension - even with your nice "0.5%" snap on torque wrench... Most of this inaccuracy is due to friction.

With "torque to yield" the idea is to tension the bolt until it yields - with steels at the yield point there is quite a plateau in stress (bolt tension) over a significant range of strain (bolt stretch) so you have very quite tight control of the tension without much accuracy needed for the amount of "stretch". Typically with torque to yield the correct stretch is just calculated by angle. For example 90deg on a 1mm pitch thread is always going to give 0.25mm stretch - no matter how much friction etc. So with this method all of the friction is taken out of the equation, provided the material is stretched to its yield, the final bolt tension is purely a factor of its cross-sectional area and the material yield strength - both factors are easy for a manufacturer to control.

This is a stress/strain curve off google and looks a bit exaggerated for steel, but it is good to illustrate the effect. I added the green and blue annotations:

As Adam said, The type of lubrication (thread lock is included in this as well) used or not used will vary the required torque for the same clamping pressure by a fair amount. If you look up some high end (aerospace and similar) assembly instructions, you will see that the type and quantity of thread lubricant to be used is specified for the critical assemblies, and it other places they will have specific instructions of no lubrication allowed on the threads.

There have been a number of air crashes as a result of the incorrect torque/thread lubrication being applied to components and then consequentially failing with usually catastrophic results.