Why are only sandpaper alphabets used to teach children in Montessori schools?

Sandpaper alphabets were designed by Dr. Montessori as a means of engaging the tactile sense of children to help them develop muscle memory in preparation for writing. The sandpaper alphabet is made up of pieces of cardstock with sandpaper letters on them, in different colors for vowels and consonants. When teaching with the sandpaper alphabet, a teacher gives the name and phonetic sound of a letter and encourages the child to trace it with their finger. 

The tactile sensation is two-fold: the muscle memory is developed in the hand tracing the shape, and the feeling of sandpaper on the fingertip creates a multi-sensory experience, connecting the feeling of the hand to the sound of the letter to its visual shape.

Montessori schools prefer to use this method of learning the letters as an introduction to literacy in a manner that bridges the highly-tactile experience of young children who love to grab and feel things with the skill of reading and writing. In a setting where a child learns their letters by practicing writing with a pencil, it can be quite foreign and present a real challenge. Developing some muscle memory and familiarity with letters before progressing to the use of a pencil can help to make a more gradual learning process.