You are right that the use of net worth might be limited, but there is still some use provided you follow some rules.
My personal rules were to not include the value of any depreciating asset (e.g. car) in my net worth calculation. I never had a condo or house, but if I had, I wouldn't have included that in my net worth calculation either. Alternatively - if you plan to sell your condo/house and move to a cheaper location, include it, but also subtract the price of your new condo/house, if you're buying again.
So for me my net worth only included my cash, investment and retirement accounts and with that it's helpful to assess how far along you are already to being FI. If your annual expenses are $60k and you plan on a 4% withdrawal rate, you need $1.5M from your investments. If you have other income (say from rentals), you only need the difference from your investments. As far as dividend income goes, I consider that part of the 4% withdrawal rate, so if your $1.5M investments throw off $30k in dividends (2% yield), you can still take out another 2% from the principal.
So the point of this (somewhat rambling) answer: I see the utility of "net worth" in withdrawal calculations, but only to the extent that it covers your cash, investment and retirement accounts. Some random "total net worth" calculation that includes the Ferrari in your garage is indeed of no value, but then that was never a problem for me.