Doesn't a diamond ring lose value once it is sold, though, in terms of re-sell value? A ring worth one bitcoin is not going to lose value once it is sold (aside from market volatility).

Yeah, but it's business as usual for petty thieves to cause 10x (or 100x, or 1000x) damage for a 1x payoff.

1000× times the diminutive likelihood that this nicely immutable paper wallet hasn't already been spent.

(A paper wallet is a paper wallet even if it is written on gold in tengwar runes that only appear when subjected to fire)

Yes, a diamond ring cannot be resold, since the price of diamonds has been decoupled from the difficulty of getting them. You're not paying that jeweler for the diamond on the ring; you're paying him a special fee for being a De Beers recognized diamond merchant. A bitcoin doesn't have that problem.

However, a ring inscribed with a private key controlling one bitcoin will lose its value immediately, because whoever comes into possession of (or ever sees) the ring will move the bitcoin.