$10M is, as they say, 'FU money'. $1M could be, maybe, but with a much different standard of living. Where I live you could easily blow the million just on a fairly standard upper middle class house. Losing most of your 10k on the other hand, while unfortunate, would hardly be life changing because it's not enough to do much with in the first place.
Now, if you reliably earn $1M a year, then sure, losing the 9M probably wouldn't be a huge issue. But that isn't the case if you're sitting on $10M from selling your startup.
Uh...I mean, $10k would pay my rent for slightly more than a year (I don't live in SF). That's more than enough time for me to find a new job. On the other hand, $1,000 would pay my rent for less than 2 months. That's plenty of time for me to get evicted and be out on the street.
Is that really true? I guess I've never been that rich, so I don't have any personal experience, but it seems to me like the lifestyle impact of going from $10M to $1M would be a lot less significant than going from $10k to $1,000.
I agree with your analysis of "total capital", but I think you're neglecting the real lifestyle factors.