What if the guy used the 3 ETH as collateral to borrow 170 DAI and bought 1 more ETH? How much would it be worth now?

($395 * 4) - ($170 * 1.5) = $1325 [assuming an unrealistic perpetual interest rate of 50%. Actual interest rate should be well below 10%]

Of course, I am not encouraging people to do this. I am trying to illustrate that is just a tool and it depends on how the user uses it.