> Nobody in Web3 is suggesting you hold all of your assets in a single private key that you physically carry to a restaurant

I'm not suggesting that, either. It's a metaphor. In the metaphor, we're not talking about crypto wallet keys, we're talking about actual, physical keys which open doors. But many people do of course keep all their crypto keys in a single, vulnerable location, or hand the contents of their wallets over to another wallet for some other purpose such as lending - typically this is on centralized exchanges or defi markets and platforms, for example Celsius - which I haven't checked in a while but can only assume is still in business, doing well and allowing customers to access their funds.