It is theoretical because it is based on the estimated, guessed, or made up value of assets. If all you have to your name is $100, your net worth is $100. If all you have to your name is a used Nintendo Switch, your net worth is theoretically $100.
This becomes even more difficult for owner large amounts of shares in the same company since you selling could have a negative effect on the shares. The reason they have the value could be that the market thinks you are in it for a long time and will provide additional value, once you start selling it could trigger a larger sell-off.
Or there could be a financial crash and the value could be cut in half.
So cash and cash-equivalent assets are special and worth more if you need to eat right now.
Even ignoring legal issues, for practical purposes society has accepted cash as the way to do trade. Everybody has cash (credit cards and checks are a proxy for cash) Thus a supermarket that doesn't accept cash is going to have problems selling anything because most people won't really know.
In the USA, cash is "legal tender for all debts", but private businesses aren't required to accept it in exchange for goods and services.
I am not redefining net worth so much as I am pointing out its theoretical (read: unrealized) nature.