AgX,
A 70mm blow up from a 35mm camera original will reduce the quality loss from the generations of dupes required to get a projection print, hence a higher quality final projection experience.
I don't think I wrote that as clearly as I could have. Right, the number of intermediates is not correlated to the format of the print film. However, if the 35mm camera original is optically enlarged to 70mm and all dupes, internegs, prints, etc after that are produced in 70mm you get a better picture than if the duplicates were produced in 35mm. Each generation of duplication results in loss of quality. If the second generation (blow up optical interneg) is 70mm, everything after that looks better than 35mm dupes.
Intermediates are needed to get a projection print for commercial theatrical projection. Not too many people are making 70mm home movies, so I am referring to release prints. There is nothing quite so beautiful to me as direct projection of camera original film like Kodachrome or Ektachrome, but commercial projects require all the intermediate steps.