Firecalc uses historic market performance and RIP uses monte carlo analysis to estimate (predict) how likely a given withdraw rate is to succeed during retirement. These tool assume a withdraw rate that is indexed to an assumed inflation rate. A SWR is one that provides a good chance for success. This may be 95% to 100% for many people.Yes, volatility happens. If my bag takes a big hit, I'll reduce my spending. This seems an easy concept.
I really only care about how much dough I have and how fast I'm spending it.
Some people do not have the flexibility to cut their spending by 50% or 75% if the market is really bad. Thus instead of spending lots more in good market, they build assets to buffer the next down turn.
This calculation of SWR is based on understanding how market volatility can screw with your ability to withdraw needed spending money. You seem to focus on the present snapshot. Retirement planning involves estimating the likely variation over long time spans.
In the end you are right... it is the size of the stash you have to pull from. SWR provides an estimation of a sustainable income stream. This is typically a pessimistic value as it tries to eliminate most or any failure. Thus over time one could increase WR. There are also variable WR that allows more adjustment over time, but still look at longer term effects than just what this year looks like.