The idea of saving someone life has a great value to the person who did the saving. They are a hero even if it is only one life. The subsequent individuals diminish in the utility they deliver because being a hero carries such great a return and only requires saving one person verse everyone. People who choose option 1 are: not doing the math or value life differently between individuals because of the effect it has on them.
How come these examples and subsequent narratives never mention the value of floors and diminishing returns? Is every life valued the same? If there was a monster or disease that will kill everyone in the world there is a floor involved. Choice 1 of saving 400 lives ensures that humanity continues (assuming 400 people are enough to re-populate the world). While have a 90% chance of saving 500 leaves 10% chance that humanity on earth ends. Would you agree that floors are important factors that do change the value of an optimal outcome when they are one time events? In other words the marginal utility of a life is diminishing in this example.
The value placed on items is really what matters because we don’t value everything the same. The true question is why do we value them differently or are we really just miscalculating the expected value? Every equation has to be learned from 2+2=4 on and maybe we are just heading up that learning curve.