If someone said "let's go communist", you would have to argue with them why it was a bad idea. A reasonable proposition that turns out not to be a good idea.

If someone said "let's kill the Jews", you would probably slowly and carefully walk away from that person because they were nuts. An unreasonable proposition that you probably don't want to bother arguing against (because what kind of person would even say that?).

When I hear that something "works in theory," I understand that to mean "if you oversimplify a little, this would work well." "In theory, there's no difference between theory and practice; in practice there is."

But it's only valid if you oversimplify a little. Starting with "first, forget everything you know about human nature" goes too far.

I don't think of "works in theory" as shorthand for "doesn't have internal contradictions" or "sounds reasonable if you forget everything you know about human nature."

I happen to have the exact same reaction to both (and it's not the kinder one).