a lien on it cannot be "perfected". that is the issue. a car can be repossessed because a UCC filing is recorded. A home can be foreclosed because a mortgage has been recorded. But that is not possible with a 401k account.
so a lender cannot give any value to it as collateral because they can never get their hands on it.
Because it is protected from creditors as long as assets remain in the account. Therefore, it serves no purpose as collateral. The only way you can borrow from it is if it is allowed by your plan with your current employer, and they can take it out of your pay. If you become no longer employed with that employer, the balance of the loan would become due in a limited time or it would be considered a distribution.
See IRS Publication 575
It is inappropriate becasue you don't need to use it as collateral.
The smarter thing to do is boorow directly from your 401K. When you pay back interest on the loan, you'll be paying it to yourself and it will be lower than the borrowing rate at the bank or another lender.
Your HR department or company plan's website will be helpful here. Fill out a loan application. You will only be able to borrow up to your vested amount in your 401K. However, any lender would not loan you more than the vested amount either.
Because it is a retirement account, not a liquid asset. You can't pull money out of it like a savings account.
if you need a loan - get the loan AGAINST your 401k plan - the rate will probably be cheaper than an unsecured personal loan with a bank