I guess I understand the argument in going after the main prize.

We are talking about a classic risk vs reward situation.  This man did not lose his money perhaps because he forgot his financial status.  He lost it, because the potential reward was worth the risk of losing his small bet. The man was betting on a life changing sum of money, not just a few extra bucks.  The potential to escape poverty, even if its a long shot, is certainly a powerful motivator.
Cash earlier is certainly the safer, more conservative option but it is not always the best choice.  To cash out early is a choice for those scared of losing what they have already "won" on paper.  Cashing out for a set amount of small money would leave the man exactly where he was before.  But ehat if he genuinely needed a big win to improve his life?