I am responding as the grandmother of a 4 1/2 year old, and friend of a kindergarten teacher. My daughter is a teacher and she sent "K" to a sitter until she was 3 and that worked out well, but we could see she needed more organized stimulation as a 3 year old.
During her first year in preschool she grew so much, more than just being with us at home. She learned how to wait patiently for food at the table, raise her hand and wait for attention, say the Pledge of Allegience, and celebrate multicultural holidays. She learned many more songs than we would have taught her and makes at least one craft a day. etc. She has learned how to sit in a circle to hear stories, to share daily chores, as well as just socializing with other children. She was given much affection by both the teachers and other students.
Our main problem was how she seemed to be sick with colds for the entire year, but then she was fine as a four year old. Kids who haven't been exposed to a lot of other kids often spend most of their first year of school sick with colds.
As a four year old, she has learned a letter a week, with its sound, to share items beginning with the letter, to sight read words, and to check out library books. She loves participating in projects like a group quilt,and being a member of performances, dress up days, pep rallies, etc. She has homework once a week which she loves. They have field trips and visits from a veterinarian, dentist, etc. It's not just the information she learns, but the broad experiences from the teachers and other students that she is exposed to. She is more than prepared for kindergarten and learning in a group situation. She is really outgoing and also well disciplined, in all social situations
My friend, the kindergarten teacher, said she has to cover so much during her year, definitely not just letters, numbers, colors and shapes. They need to read and write sentences by the end of the year and do mathematical problems. With kids at such greatly differing levels of preparation, the kids who come in without knowing dynamics of being a member of a group and not being the center of attention like they are at home, are at an initial disadvantage.
If you can afford it, and the experiences at the preschool are more than you could or would provide at home (not just a play school) I believe it really enriches the lives of the toddler as well as prepares them for school. As an alternative, explore the awesome programs sponsored for free at local libraries.