If you go over $250k, you can just open accounts at other banks to keep being insured. Or get your own insurance I suppose.

My point was that if many would struggle to put together $400 in cash, they’re likely unaffected by a $250k upper limit on insured deposits

How many people do you think have more than $250k in the bank? How many people do you think have more than $250k in FTX? It sounds like you're saying it's not good enough because 0.1% of people won't get the full benefit.