When we assume the block reward will become negligible what we're actually doing is projecting out today's purchasing power of the reward and concluding it's tiny.

I think that's the wrong way to think about it. Even though the reward will eventually be measured in sats. Those sats should be worth a lot more in purchasing power terms.

Currently the reward is 6.25 BTC. Using the fiat price as a proxy for purchasing power we can conclude that's worth about $400k. Compare that to the cost of electricity and we get the purchasing power.

What happens in a few halvings when the block reward is only 0.78 BTC? If we assume the purchasing power remains the same we conclude the reward is negligible. But it's a different story if 0.78 BTC can still buy the same $400k worth of electricity (in today's terms)