Although I usually use liquid, The first time I bought dry yeast at the local brew shop, I was told to never re-hydrate and to always sprinkle dry on top of the wort. After reading several posts here, I decided that it would be best to re-hydrate to get faster starts and have more cells survive the initial pitch.
I questioned the brew shop guys as to why they don't advise people to re-hydrate and they said that in their experience, some customers using dry yeast are rookies and re-hydrating incorrectly is a big risk for contamination. They said it is easier to instruct customers to use it the most risk free way (dry) and that if someone is more experienced, they will re-hydrate without being told to do so.
THIS ^^^
Pitching dry yeast on top of wort that is at the correct temp, for a beer that is not big, works every time.. It will make beer...
Does it stress the yeast? Perhaps, but I think it stresses the Home Brew Snobs out more
Pitching dry removes a step or three, making for a better chance of success to the new brewer.. Success means they try again, and again, and again...
After a few batches, they learn of rehydrated yeast, liquid yeast, washed used yeast,,and the learning continues.
Pitching dry yeast on a simple med to low gravity beer works, proven many times over..
Pitching rehydrated dry yeast will make beer as well,,,,, usually a faster start to fermentation, and to those with a discerning, experienced palate, might reduce some off flavors in some beers.
Im drinking a nice beer right this second that was pitched with dry yeast,,
MIKES TEXAS MIDNIGHT ALE, Mildly hopped dark brew, using 11 grams of Safeale 05.
I like the beer, everyone that has tried it likes it, pitching dry yeast on top of 5 gal 62deg wort, fermented for 21 days at 64-66 deg made darn good beer.
That said I now rehydrate my yeast

.. if for no other reason , faster starts to fermentation. I can also pitch a bit less if doing a bigger beer