Bob's suggestion is excellent. It's a good way to break the seller out from the self-denial shell.
Addressing your specific question, though, as to why they don't want to understand today's market value: There's often a disconnect between the rational and the emotional. Ask those sellers, rationally, what's happened to housing prices over the past couple of years and many will acknowledge that prices have dropped. They'll admit that the house down the block (identical to theirs) sold for $30,000 less than they're asking. But, they'll explain, their house is different. (And here comes the emotional.) The owner spent two months perfectly painting one of the bedrooms, and is now working on the second bedroom; you'll never see a better paint job anywhere, he explains proudly. (That's a true story!) Or it's worth it because the owner just fixed up his garage. (Another true story.) Or because the owner has some grape vines on the side of the house; you won't find that in any of the other properties on the block. (Another true story.)
They'll take examples they're emotionally (and sometimes financially) invested in, and then inflate it all out of proportion to justify the price. Years ago, I thought they were just trying to "blow smoke" at me. But I've come to realize that, at least in many cases, the owners have persuaded themselves that these small improvements, if they actually are improvements at all, have radically elevated the value of their property.
Just an observation.