It’s the risk:benefit tradeoff always. Sure you can hold on to all your illiquid stock in a private company with transfer restrictions, but will that pay for a house or even a banana? Does it ever not. The “take a loan for liquidity until you can sell some stock” trick worked for a little bit but companies are wise to that too now, and don’t allow it.
So people can pick between real money they can spend on stuff (or invest in a slightly less illiquid way) or being paper multimillionaires with no actual liquidity; not a hard choice imho.
I’m sure there are plenty of true believers (there always are in startup brain land), but even true believers like spending money.