There are a lot of materials that seeds can grow in, and it's tough to say exactly what is "best," but there are many things that are needed for a seed to grow, and having all of them lets it grow best. The amounts of each of these can differ a lot between plants, for example, a cactus seed won't need as much water as something more suited to a rain forest, for example.

In general, seeds need water and nutrients to grow. Too much of these can be bad though, and make the seed rot. The nutrients specifically are the elements carbon, hydrogen, oxygen, and nitrogen. These are found commonly in peat, which is mostly dead plant matter and makes a great material to grow seeds in.

It's not surprising that dead plants make good food for plants, when you think about it: dead animals make good food for animals. Most of the mass of a plant though comes from the air: turning carbon dioxide into plant matter and releasing oxygen.