Wouldn’t it be much less than 51% in practice since a lot of Bitcoin is in hardware or non-custodial wallets?
No, 51% refers to the active mining pool (who package and validate transactions) vs 51% of the currency itself.
He certainly could, but that'd be stupid right?
Depends on their intent. It would be silly for an actor who wishes to maintain the value of their holdings, but if their goal was to destabilise the currency, it provides an attack vector.
Exactly. Like anyone with a ton more at stake if it succeeds like the banking system.