Uh, no. The final 2x4 product is milled mostly dry. Mills allow the timber to air dry, then mill, then post-kiln, and may mill the final product after that e.g. by cutting 2x4s out of a 12x4. The reduction of a 2x4 from 2x4" to 1.75x3.5" is done on purpose, because modern mills can put guarantees on the density of knots in the wood, thus requiring less wood for the same engineered strength guarantee. So the 2x4" product is not actually 2x4 because the mill is asserting that while there is less wood than just cutting a 2x4, the board they're selling is as strong as a 2x4 would have been at the turn of the 20th century, when they didn't have a way to guarantee the density of knots.
It's just an established convention. And it sucks.