Depends what you mean by prototyping. There's lashing up something on a breadboard, there's bolting together some dev boards/breakout boards in a permanent fashion, and there's building something that looks almost exactly like what you intend to actually put into production. Arguably, the first scenario is experimentation, the second is a proof of concept, and only the last one is a prototype--but there are some gray areas in between as well.
Some projects simply don't lend themselves to the first two. The minimum workable hardware may be so complex to assemble (eg, something like a PC motherboard) or may require such specific and tightly controlled manufacturing constraints to work at all (RF) that you may as well start designing for production right off the bat, because a proof of concept board would be just as expensive as the production board (and has the disadvantage that you'll DEFINITELY have to pay for new tooling when you build the production board, whereas if you design for production initially you might get lucky and not have to make revisions that will require new tooling).
Ultimately it's a risk/benefit decision. Personally, I might build up a test setup for a very specific aspect of the circuit ahead of time, but mostly I go straight to a producible design and expect to make a revision or two--given the type of projects I work on, that's a better use of my time and development budget than trying to cobble something together a test system and then still having to do the production design afterward.