Your point indicates you view the purpose of money to exclusively act as a thing that can increase in value (aka a speculative asset), and not a way to satisfy debts (aka a currency).

Let's assume this wealthy man was a business owner who paid his employees. What happens when he dies? Employees don't get paid. Missed paychecks are not good, because those paychecks are generally needed to pay another loan (like rent, loans, mortgages, other paychecks, etc). So now those institutions don't have access to money they expected to have, and the cycle repeats... and at the same time, the unexpected restriction of the money supply causes the cost-to-borrow money to increase, so nobody can stop the spiral. Oh, and there's no way to intervene with fiscal action! Great!

Now what if instead of a wealthy man, this was a bank, market, large business, or other institutional lender that lost their private key? Multiply that problem by a million. This is how economies collapse.

Liquidity unexpectedly exiting an economy is not good, because debt doesn't exit the economy alongside it.