I'm not sure how they measure, but believe me, most speakers won't even go that loud, or if they do, they will distort tremendously, unless the room is very big, or very well acoustically treated, room interaction will spoil the listening experience.
"I'm not sure how they measure"
with a SPL meter and numerous SPL charts available on the Internet that serve as a frame of reference.
"but believe me, most speakers won't even go that loud"
Totally and utterly false. There is such a thing as manufacturer specs that can be used to derive the information. That would be in addition to user testimonials by folks like myself that use meters, and have stood next to jack hammers once or twice in their lives. Note I'm speaking of as much as 110db, not 120.
"or if they do, they will distort tremendously"
Depends on the characteristics of the music being played. The distortion - if any is in fact really audible - is at the higher frequencies.
"unless the room is very big, or very well acoustically treated, room interaction will spoil the listening experience"
The venue is always part of the equation and overall presentation of the music. Same for live acts.
So I suppose I'm among those folks who have surprised you, because my system can effortless go to 100db and sound fantastic doing it.
I'm always (practically, not at 2AM in the morning) ready to demo my system to any doubting thomases. I'm in zip 11520. Just PM and we can get the party started. :)