>what's qualitatively different between 70% of the population working with 30% on welfare, and 10% of the population working with 90% on welfare?

The government receives less tax revenues because 20% of the population is no longer working (and paying taxes). At some point if enough of the population is no longer contributing, unless there are massive changes in how we manage the economy, the country will become insolvent and won't be able to afford the welfare payments as tax revenue decreases.