Imagine there's a machine that you can deposit dollar bills and it registers in an internal database how much you have. The machine calls these stored values as wrapped dollar. You can withdraw your wrapped dollars back as dollar bills whenever you want.

This machine also allows you to send these wrapped dollars to other people - it just subtracts from your balance and adds to the other person's.

What this guy did is transferring his wrapped dollars to an address no one controls instead of withdrawing as he should. This address was the machine's address, but it's not programmed to handle the balance in it's own account and it runs code that can't be upgraded, so any values sent there are lost.

In this example dollar = ETH, wrapped dollar = WETH, machine = the WETH smart contract.

The real problem here was thinking a ETH transfer (dollar bill deposit in the example) works the same as a WETH transfer (database transaction in the example).

Thanks. This all sounds so complicated and frankly scares me away from using these technologies. I would be worried about making this kind of mistake or worse.