Take a smart scale for example. Mine uses wifi and is in deep sleep almost all of the time. When you step on it, it weighs you, connects to wifi, and sends the measurement. This does fine on battery because it only gets used a few times a day max, and I think it may power up the radios to look for a software update once a day or something. If it had to power up the radios every 5 minutes though it wouldn't last a year on a charge.
Another example would be a water/flood sensor. The overwhelming majority of the time, it has nothing to report. Maybe once a day or so it should report the battery level and that it's still there. You can still get great battery life as long as you don't have to turn on the radio all the time, but Matter doesn't really let you do this, in my understanding, at least as of the current revision.
I think you're right that this won't work well with a CR2032, but if you're careful about using good voltage regulators it can last a long time on 4 AAs.
That's why we have Thread. Wifi just isn't a very efficient protocol for using with deep sleep. The radio takes more power to run, the overhead of connecting is higher, and the device needs a full IP stack. Even with power save mode (if supported by client and AP), the radio is on for hundreds of milliseconds to send a message.
Thread has "sleepy end device" profile built-in where the hub will queue messages and expects the device to be in deep sleep most of the time. And since it doesn't have so much overhead, the radio only has to be on for tens of milliseconds.